Estate planning is a way for you to ensure that someone carries out your wishes after you pass or when you are incapacitated. This way, a designated individual you trust assumes control over your financial and medical affairs when you cannot do so as a Delaware resident.
Estate planning can be simple or complicated. If you have many assets that you wish to bequeath to multiple people, drafting a will is time-consuming. If you want to leave everything to your surviving spouse, it’s an easy task. Wills, however, have an executor and usually need to go through probate court, which may result in lengthy challenges and procedures. The executor must locate heirs, pay the estate’s debts and liquidate whatever’s required. In Delaware, if your estate value is less than $30,000 and you own no real estate, your executor may submit a signed affidavit and distribute the assets to the heirs.
There are two basic kinds of trusts: a revocable trust and an irrevocable trust. You may fund the account with almost any type of valuable, including currency, artwork, automobiles and real estate. After you die, a trustee distributes the assets according to your written directives.
By transferring all your belongings to a revocable trust, the estate avoids the expenses and delays associated with probate. You can manage the assets and change beneficiaries during your lifetime. Revocable trusts are not protected from creditors and do not reduce the size of the estate for tax purposes.
The contents of irrevocable trusts are protected from seizure by creditors and do reduce the value of an estate. However, once you transfer assets to the account, you no longer own them, and your named trustee manages them.
Power of attorney
A general power of attorney grants someone the authority to sign documents for you. These can cover legal, financial or health matters. You can make this effective immediately or only after some event occurs, such as incapacitation.
Advance healthcare directive
A Delaware advance healthcare directive grants a medical authorization to your named agent, who can make decisions when you are incapacitated. The document allows you to choose if you wish to receive life-prolonging procedures and what treatments are permissible if your condition is terminal.
It’s never too early to start planning for future contingencies. Do it now while you can still control the process.