The Building Blocks of Estate Planning

Confused by estate planning terms? Uncertain how different types of plans work together? Consider the building blocks of a solid estate plan.

JOINT OWNERSHIP PLANNING
When an asset is held in joint names such as "joint tenants with right of survivorship"or "tenants by the entirety"(husband and wife), upon the death of a named joint tenant, the asset passes to the survivor free of probate and without regard to what the will or trust might say.

BENEFICIARY DESIGNATION AGREEMENTS
Certain written agreements or contracts are authorized by law to transfer an asset at death with a "beneficiary designation."This includes "payable
on death" designations at financial institutions or the traditional beneficiary designations in IRAs, other retirement accounts, life insurance policies, etc. The asset is transferred at the death of the owner (free of probate) to the named beneficiary or beneficiaries.

LIVING TRUST
A living trust is a private agreement that avoids probate of assets titled in the name of the trust. Assets not transferred to a trust are controlled by a person's will. A trust usually contains the estate distribution plan and provides "lifetime"direction and protection for assets in the event of incapacity.

WILL
A will takes effect on death and describes how assets are distributed. A
will must be probated, requires public scrutiny, and must meet formal requirements of state law. Assets not passing through joint ownership planning, beneficiary designation agreements, or a trust will usually pass by the will through probate.

DURABLE POWER OF ATTORNEY - FINANCIAL
A durable power of attorney usually takes effect if an individual can no longer handle their financial affairs because of illness, or incompetence. Without a durable power of attorney, family or friends may have to go to court, sometimes requiring adversarial litigation, just to try to help.

DURABLE POWER OF ATTORNEY -
HEALTH AND PERSONAL CARE
Individuals often appoint a different person to help with personal matters such as health care, medical attention, or personal care. A power of attorney for health and personal care allows someone to assist with these vital matters.

LIVING WILL
A living will states that if an individual has an incurable injury, illness, or disease certified terminal and applying life-sustaining procedures only prolongs their death, they do not want to be kept alive at great cost and expense. There are many factors to prayerfully consider with a living will.

If you would like help in building your estate plan, call the Assemblies of God Foundation at 800-253-5544. The Foundation's staff is trained in estate planning and planned giving and can assist you at no cost or obligation.

By Randall K. Barton, Former CEO
Assemblies of God Financial Solutions