Most people in Iowa know they need an estate plan, but few actually have one. An estate plan determines what will happen to you and your assets once you can no longer manage on your own. Estate plans take effect when someone becomes incapacitated or when they die. A comprehensive estate plan needs to consider healthcare, taxes and people who can act in your stead.
Documents to consider
The cornerstone of an estate plan is a last will and testament. This document names an executor who acts to fulfill your wishes. It also explains how to distribute your assets and who should be the guardian of your minor children.
Documents like healthcare proxies are also important. They name a person to make medical decisions for you in the event that you cannot. Like an executor, this person will have to act as a fiduciary. That means they need to make decisions that will align with your goals, not theirs.
Insurance policies are legally binding documents that should also be considered as part of your estate plan. Each year during open enrollment periods at work, you should look at these documents and make sure the right beneficiaries are designated.
Trusts are a part of many estate plans, especially for individuals with high net worth. Trusts can be used to protect assets from high tax rates and pass money on to a spouse or child. Lawyers create these legal entities, often with input from financial advisors.
Estate planning may sound boring. Actually, it requires a lot of teamwork. Lawyers, insurance agents and financial professionals will typically need to work together to craft an estate plan that takes all eventualities into consideration.