August means school is back in session or just around the corner, signaling the return of new school supplies, homework, and pop quizzes. Try your hand at this estate planning pop quiz to see if your knowledge of estate planning makes the grade and if it is time for us to schedule a meeting.
Question #1: True or false? You must name the same person to make both your financial and medical decisions on your behalf.
Answer: False. When choosing who should be your decision makers, you should select individuals based on their strengths. In other words, you should consider what characteristics or traits each decision-making role requires and select the people who have those traits. You may also need to consider that choosing the right person for the job could mean going with a professional.
Question #2: True or false? If I do not create my own estate plan or if my plan fails to provide for my current situation, my state’s law will decide what happens.
Answer: True. Every state has default laws (called intestacy laws) that kick in if a person has not made their own estate planning choices. These laws are designed with a “one size fits most” situation in mind. For this reason, it is essential that you create your own estate plan and make your own decisions. If you have not created or finished your estate plan, now is the time to stop procrastinating and make an appointment with us to complete it. If you have an estate plan, consider reviewing it in case your existing estate plan does not accurately reflect your current situation.
Question #3: True or false? A will accomplishes all the same goals as a trust, but a will is cheaper.
Answer: False. While both a will and a trust can give instructions about how you want your property to be distributed upon your death, one of the biggest differences between a will and a trust is that a will has no effect until the time of your death. A trust, on the other hand, can be utilized to deal with a period of incapacity (a time where you cannot make or communicate your wishes) that may occur prior to your death, which can be very helpful for loved ones trying to care for you. Additionally, a will guarantees that your loved ones will have to go through the probate court process upon your death. On the other hand, when you use a trust and properly fund it, your successor trustee can immediately step in and deal with the property in your trust without any court intervention.
No matter your score on this estate planning pop quiz, you can be an A+ student by ensuring that you have a specially tailored plan in place with carefully chosen trusted decision makers. We can help you create or update your plan to ensure that it will work as you intend when the time comes.