You have probably heard terms like foster care, probate court, guardianship and conservatorship. In your estate plan, you should have a living estate, wills, financial powers of attorney and healthcare directives.
According to FindLaw, a living trust is a document where you nominate successor trustees to manage your assets for your heirs in the event you are no more. Why do we need to set up a living trust? Well, if you have savings, brokerage accounts or you own any real estate, these assets go through probate, which is a time consuming, very emotionally draining process. Not only that, your assets are exposed to your creditors during this process, and you do not get to control how your assets are distributed amongst your heirs because the court gets to decide that. By setting up your trust, you get to nominate successor trustees who will follow the guidelines you leave behind within the trust. So not only do you get to avoid probate court, but you get to control the estate in the event you are no more.
A guardianship is essentially who would care for your children if you were not here. You want to be sure that you have nominated individuals who are like-minded and who will care for your children in the way that you need them to be cared for. The alternative is foster care or a judge making a decision and determination about where your children should be raised and on what terms they should be raised.
Another element of your entire estate plan is the financial power of attorney. A financial power of attorney is a document that you put into place today that says if you are ever mentally incapacitated, you nominate these individuals to make the decisions on your behalf.