Estate Planning in Louisiana for 2022: Do You Have These Documents Prepared?
Estate planning is an often complex financial process that nearly all investors should consider. It includes reviewing legal and tax implications, investment strategies and personal questions to ensure your estate is set up efficiently.
As we ring in 2022, let’s look at some of the most important estate planning documents you should have prepared.
Wills & Trusts
When you think about considering estate planning in 2022, one of the most important documents to consider is your will or trust. A will is a document that spells out your wishes regarding the distribution of your assets and care of any dependents if needed. A trust is a tax-advantaged way to arrange ownership of your assets and allows a third party to hold these assets on behalf of a beneficiary.
Both of these documents are usually part of a well-crafted estate plan because they have different focuses. By preparing these important documents, you can help protect your legacy and make the transition of assets easier when you are gone.
There are also two subsets to these documents: living trusts and living wills.
What is a Living Trust?
A living trust is a legal document that places your assets in a trust while you are alive and also designates where these assets will go upon your death. Some investors choose to also implement a living trust into their estate planning strategy because it is revocable (meaning that it can be changed), and it may allow your estate to bypass probate, which can be a long and costly process.
What is a Living Will?
You can also set up a living will, which is a directive to physicians that explains your end-of-life medical care preferences. If you are unable to communicate, a living will helps doctors and family members make decisions about your care based on what you would prefer (e.g., CPR, mechanical ventilation, tube feeding, organ donation).
In your living will, you may also specify a healthcare power of attorney, which is an agent who can make important healthcare decisions on your behalf.
Beneficiary Designations
A will or trust explains how you would like your assets distributed among beneficiaries, so it’s also important to update your beneficiaries as you build your estate plan. You should have a contingent beneficiary stated on all insurance and retirement accounts, as well as contingent beneficiaries stated in your will or trust. The new year is a great time to review your beneficiaries as things can change (e.g. marriage or divorce, kids and grandkids, new in-laws, etc.) and having an outdated estate plan can be a recipe for disaster.
If no beneficiary is stated, your estate may end up in the hands of the court, which can be an impersonal way to handle your assets because a judge has no familiarity with your wishes.
Power of Attorney
Power of attorney (POA) is given to the agent or person you designate to act on your behalf and oversee your will if you are unable to do so. It’s important to designate POA because if you don’t, the court may decide how your will and assets should be managed.
You don’t have to give POA to a family member, either. You can choose a trusted friend or financial advisor to act as the agent of your will, especially if they have a strong financial and estate planning background.
Health Care Directive
A Health Care Directive is a document that allows you to set up your wishes as it pertains to your healthcare. It comes into play in the event that you are unable to communicate or make decisions concerning your medical care.
These are just a few of the important documents you should consider adding to your estate planning strategy in 2022. Talk with your financial advisor about everything you need to know when getting your estate in order.
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Take Care,
Jerry Broussard, CFP®
Jerry Broussard is a Kaplan, La and Lafayette, La Fee-Only Financial Planner serving the entire Gulf Coast region. Broussard Financial Group, LLC specializes in providing objective financial planning to help clients build, manage, grow, and protect their assets through life’s transitions. Jerry Broussard is also a NAPFA-Registered Financial Advisor and a CERTIFIED FINANCIAL PLANNER™ Professional.
This content is developed from sources believed to be providing accurate information and it may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security.