An estate plan is a legal document or set of documents that outline an individual’s wishes regarding the distribution of their assets and the management of their affairs in the event of incapacity or death. While there is no one-size-fits-all estate plan, specific components should be included in all plans.
Knowing what to include and how to tailor your estate plan to your needs and goals can help ensure your wishes are fulfilled.
1. A will
A will is a crucial and legal document that spells out precisely what you want to happen to your wealth, assets, and possessions when you pass away. You can include anything from giving particular possessions to specific people, specifying who raises minor children in the event of your death or creating charitable donations.
One of the options available for protecting your assets is a trust. These legal instruments allow you to transfer property or other assets to someone else and determine how that person manages and uses them.
3. Powers of attorney
Having a power of attorney is vital when putting together an estate plan. Without it, no one can make decisions on your behalf should you become unable to do so yourself. A power of attorney can be used for various situations, from making financial transactions to health care decisions.
4. Advance health care directives
A health care directive allows you to designate your medical preferences and illustrate how you want care decisions to be made if you cannot make them yourself. This document provides critical guidance to loved ones and medical providers at a time when decisions may otherwise be difficult and uncertain.
While there are certain items you should include in your estate plan, you will want to work with someone who can prepare a plan that meets your particular needs. Though no one likes to think about their mortality, creating an estate plan now can give you and your loved ones peace of mind.