Your estate plan protects your assets and family, but it can also help you prepare for an uncertain future. Few people reap the full benefits from estate planning, with sometimes tragic results if their final wishes are not honored. Here are some essential estate planning documents to include to make sure your plan covers everything.
1. Living trust
With a revocable trust, you retain control over any assets placed within the trust. You can also establish criteria for how inheritances are handed out. For instance, you can delay an inheritance until an heir has reached a certain age or accomplished a certain task. Trusts also help you avoid probate, since assets placed in the trust are owned by the trust itself and not by you.
2. Advance directive
Many people have specific wishes for end of life care. Unfortunately, family and medical staff may disagree with these wishes, which can lead to them not being respected. An advance directive spells out what you want to occur and provides you with the legal backing to have your wishes met. It also prevents your family from trying to decide the type of care you would prefer when they are not entirely sure.
A will is a basic, yet vital, part of an estate plan. A will says what you would like done with your property and assets at the time of your death. It also allows you to leave parts of your estate to charity and arrange a guardian for minor children in your care.
4. Financial power of attorney
If you are unable to make decisions due to incapacity, a financial power of attorney is a person who steps in to act on your behalf. This person will be responsible for managing your money, which can include paying bills, making investments, or any other financial tasks you see fit. Ultimately, you decide how much authority your power of attorney has.