A will, also known as a Last Will and Testament, is a legally enforceable declaration of how a person wants their property and assets distributed after death. In a will, a person can also recommend a guardian for their minor children and make provisions for any surviving pets.
A will is an important component of estate planning. A will ensures that the person's wishes are carried out and can make things easier for their heirs. If an individual dies without a will, the distribution of his property is left up to the government, and may even end up becoming state property.
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A living trust is a type of trust created during a person's lifetime. It's designed to allow for the easy transfer of the trust creator or settlor's assets, while bypassing the often complex and expensive legal process of probate. Living trust agreements designate a trustee who holds legal possession of assets and property that flow into the trust.
Living trusts are managed by a trustee who typically has a fiduciary duty to manage the trust prudently in the best interests of the trust's beneficiary or beneficiaries designated by the trust settlor, also called a grantor. Upon death of the settlor, these assets flow to the beneficiaries according to the grantor's wishes as outlined in the trust agreement. Unlike a will, however, a living trust is in effect while the settlor is alive and the trust does not have to clear the courts to reach its intended beneficiaries when the settlor dies or becomes incapacitated.
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An advance directive is a living will documenting one’s wishes for end-of-life medical treatment. The document instructs whether dialysis, breathing machines or tube feeding are desired, whether to resuscitate and whether to donate organs and tissue at the end of one's life. Planning ahead provides the medical care a person desires and avoids unnecessary suffering, disagreements and decision-making burdens during times of crisis. Two physicians must certify the person is terminally ill, seriously injured, in a coma, in the late stages of dementia or permanently unconscious and unable to make medical decisions before the living will is enacted.
An advance directive becomes legally valid in the United States after signing in front of a witness. However, emergency medical technicians cannot honor a living will; they must do everything in their power to stabilize a person for transfer to a hospital. Once a physician fully examines the person’s condition, advance directives can be implemented. Completing a new living will invalidates the old one. An advance directive should be updated periodically to stay current with a person’s changing end-of-care desires.
Final expense insurance is designed to cover the bills that your loved ones will face after your death. These costs will include medical bills and funeral expenses. Final expense insurance is also known as burial insurance. Unfortunately, even bare-bones funerals can cost thousands of dollars. The ins and outs of insurance policies can get tricky. Here’s what you need to know about final expense insurance.
A final expense life insurance policy isn’t the same as what’s known as “insuring your life.” Insuring your life concerns leaving your family and loved ones with enough support after you pass away. Term and permanent life insurance value your policy as proportionate to your earning power now and for the rest of your life.
With funeral insurance, the value of your policy is proportionate to the expense of your desired funeral. While other forms of life insurance can top a million dollars, it’s rare for final expense insurance policies to get above $20,000.