It is difficult to think about the future when the present is so unexpected. Nonetheless, individuals in New Jersey and elsewhere should take the time to consider what they want for their future and what can be done now to protect it, especially when it comes to their loved ones and their inheritances. No matter a person’s age, if they are single or married, have children or not or in school or in a career, it is vital to explore how an estate plan could benefit them.
Estate planning
Each estate plan is tailored to the needs and goals of the individual drafting it. While this makes each plan unique, there are certain documents that are commonly used in all estate plans. The eight essential documents will be discussed below.
The first is a will. This document determines what will happen to one’s finances and possession after they pass. It also establishes what one believes is in the best interests of his or her children or pets. An executor is named, and this person is charged with the task of following he directions set out by this document.
The next is a revocable living trust, which is used to pass assets to heirs while avoiding probate. The third is beneficiary designations. This is done on various documents, such as a life insurance plan, retirement plan or bank account. These designations take precedence over the instructions of a will, so these are considered very important to keep up-to-date. Fourth is a durable power of attorney, which allows an individual to make financial and legal decisions on your behalf if you are deemed incapacitated or unable to do so.
Other important documents
A health care power of attorney is a document that designates a person to have the power to make medical decisions on your behalf of you if you were to become incapacitated. A living will is an other important document, as it explains in advance what type of care one wants and does not want with regards to end of life care. A digital asset trust is important to consider, as it explains what one wants done with their electronic property.
A letter of intent can provide many benefits, as it addresses information that doesn’t belong in a will. It can help convey one’s wishes and instructions for how things should be done or carried out, such as his or her funeral. Finally, a list of all the important documents can be a very beneficial document to include, as it indicates what is included and where it is.
Drafting an estate plan may seem like a daunting and confusing task; however, it is one that is considered important. Additionally, it is also something that can be updated and altered with each and every life event. This helps individuals feel at ease, as it doesn’t mean each decision is set in stone. Because the process can be complex and an estate plan contains numerous documents, it is imperative one gains insight on the process and how best to move forward and complete it.
