Article provided by Personal Finance & Tax, and written by Matlhodi Leteane, FNB Fiduciary

There are many myths associated with estate planning—and one such myth is that its only for the wealthy.  In fact, estate planning is for everyone, and people can benefit from ensuring that their assets and finances are properly taken care of after their death. In addition, estate planning involves giving permission to family members or an executor to carry out your wishes if you become incapacitated while you are still alive.

Here are five considerations that will help you get started and thinking on your estate planning needs and requirements:

Is your will in place and valid?

This is a crucial start, as people simply neglect or ignore the importance of having a valid will in place.  A will is a simple document that contains all your wishes for your loved ones. Sit down and take time to review the assets and investments that you have accumulated, and decide who you would like to leave these to.  If you already have a valid will, review and check whether your circumstances have changed—these changes need to be factored into your will.

Do you have a trust?

A consideration is to set up a trust if you have a large portfolio or asset base, or have vulnerable family members who need specific care, or assistance with managing their financial affairs.  It may sound complicated or expensive, but with the proper guidelines and advise, you can establish your own trust. A will combined with a trust should be the main components of every estate plan.  This ensures that your assets, investments, and generational wealth is preserved and distributed according to your specific wishes (subject, of course, to state laws). Some trusts help limit estate taxes or legal challenges.  However, simply having a will or trust isn’t enough—the wording contained in the documents is critically important.

Have you made the appropriate nominations?

Are you happy with your selected beneficiaries, or guardians nominated to look after minor beneficiaries of your estate?  As you mature and your circumstances in life change, it is worthwhile to review your will and decide whether you are still happy with the nominations that you have made therein. If the beneficiary is deceased, that portion that would have been due to a deceased beneficiary may devolve in a term of the Intestate Succession Act if the will does not make provision for substitute beneficiaries. If you have minor children or are considering having kids, picking a guardian is incredibly important—and sometimes overlooked.  Make sure the individual or couple that you choose shares your views and values, is financially sound, and is genuinely willing to raise children.  As with all designations, a backup or contingent guardian should be named as well.

Have you drafted a letter of intent?

A letter of intent is simply a document that you have drafted to your executor or a beneficiary.  The purpose of the letter is to define what you want to be done with a particular asset after your death or incapacitation.  Some letters of intent also provide funeral details or other special requests. It has been said that this document may not be binding in the eyes of the law, but this helps inform a probate judge of your intentions, and may help in the distribution of your assets if the will is deemed invalid for some reason.

Do you have a power of attorney?

A power of attorney (POA) is an agent or a person you need to assign so that they will act on your behalf when you are unable to do so yourself. If you don’t have a POA, the court will be left to decide what happens to your assets if you or your beneficiaries are found to be incapable of looking after your assets, and the court’s decision may not be how you wanted your wishes to be carried out. It is important to mention that a POA will cease to be valid if the principal (the person signing the POA) is to suffer from mental incapacity.

Conclusion

These considerations should be weighed up against your current will and estate plan.  If you are unsure of how to carry out your wishes, it is recommended that you consult appropriate financial and legal professionals who can guide you in this process.