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Estate Planning Basics

By Origin

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May 7, 2024

According to a Caring.com study, more than 60% of Americans do not have a will. No one likes to plan for a future without them in it, but creating an estate plan means your loved ones are protected for life, and your wishes are known for your estate. Preparing for your passing is one of the greatest acts of love you can do to help your friends and family during a difficult and stressful time. Estate planning can feel a bit daunting, because it is a lot to think about, and historically, you have to go to an attorney to create.

For those who are looking for a more simple, cost-effective, and convenient way to create a plan, working with an attorney isn't the only option. Online estate planning tools, like Origin, have modernized the estate planning process providing a step-by-step estate planning tool created to help Americans protect themselves, their loved ones, and their legacy. Below we've outlined some of the most common questions we see and our answers.

What is an estate plan, and why do I need one?

An estate plan is a set of legal documents that protect you, your loved ones, and your belongings in the event of incapacitation or death. Unfortunately, the government has a rigid set of rules that apply when you neglect to create an estate plan, leaving you without a voice, and your family on the hook for costly probate-related fees. That's why we believe all Americans should have an estate plan.

While estate planning is not just for the wealthy, most people, and their loved ones, can benefit from putting legal affairs in order. For example, without an estate plan, your state legislature decides who gets your assets and, if you have minor children, who will care for them. Typically, without estate planning, the state courts will pass on any assets you own at your death to your closest relatives, even if that would not have been your choice.

Estate planning gives your family a roadmap to follow when you pass away or become incapacitated, making sure your belongings are passed on to those you select and designating who will have the authority to oversee that your wishes are honored. Failing to address your estate may result in wishes not being followed along with those closest to you having to deal with an administrative mess.

What are the most common legal documents that people customize to protect themselves and their families?

Last Will and Testament

Also referred to as your Will, is a legal document that describes how your assets are distributed, who will manage the settlement of your estate, and who will be the guardian for minor children. The following is required to make your Will legally valid:

  • It must be in writing. Although you can compose your Will online, you must still follow your state's signing and validity requirements to make it legally valid.

  • It must include witnesses. Your state has rules regarding any notary and witness requirements. You must follow these rules to the letter.

General Durable Power of Attorney (also known as Financial Power of Attorney)

This enables someone to act on your behalf if, during your lifetime, you are in a condition where you are unable to sign or transact for yourself. In many cases, this person's power to act for you is triggered by a physician documenting that you are in a state of incapacity.

Guardianship Designation

The person who will have the powers and responsibilities to care for a minor child's needs. In most states, children require a guardian until the age of 18 years old.

Living Trust (also known as a Revocable Living Trust)

Similar to the Last Will and Testament, however, a more private and powerful approach to administering your estate and distributing your assets. They are generally known for avoiding the court and attorney-involved probate process by having your titled assets already in the name of your trust or designated to go to your trust.

Health Care Power of Attorney or Advance Health Care Directive

This document lets you give someone you trust the legal authority to make important decisions about your medical care when you are unable to.

Living Will

Includes your instructions regarding life support machines and takes effect when you have a terminal and irreversible condition. ‍It may also include your decisions around organ donation and pain management.

HIPAA Authorization

This document must be signed to authorize someone to discuss your health care, health insurance, treatments, etc., with a health care provider or insurer. If you do not sign a HIPAA authorization, privacy regulations prohibit your health care providers from sharing information regarding your Protected Health Information (PHI) with others.

How often should I review my estate plan?

It is recommended to review your estate plan at least annually and update it as your life circumstances change, such as getting married, having a baby, going into major surgery, getting divorced, or any other major life event.‍

How much time should this take?

Millions of people before have started and completed the process. It’s pretty straightforward and any signed reasonable plan is better than debating your selections for a long time and NOT having a plan when you need it.

You can change your estate plans at any time, so you can easily come back to revisit if you want to refine your plan or if life circumstances have changed.

Online plans can be completed in as little as 20 minutes but can take more time if you have some unique considerations however it all can be done in one session. You will then need to print your documents and arrange a Notary and two witnesses. Notaries can be free or at a low cost per seal - check with your friends, employer, bank, AAA Store, or The UPS Store for access to a Notary. Once notarized with witnesses, your documents are instantly legal and live.

Is online estate planning right for me?

Yes, online estate plans are a fast and easy way to protect your family. A step-by-step guide ensures you can complete the process that reflects your wishes and is designed by attorneys to be legal in all 50 states. Once your documents are generated, they will need to be printed and signed. If you can’t fulfill your unique requirements online, consider meeting an attorney, this approach will be considerably more money to compensate the attorney for their time and effort.