Estate planning essentials you should not be without
You may already know how important it is to have an estate plan, but do you know everything that should be included in your plan? Since the future is unpredictable, it is important to create a comprehensive estate plan to make sure your family and your final wishes are taken care of.
A will is just one part of an estate plan that everyone is aware of and will usually want to complete. But an estate plan is much more than a last will and testament. You will want to make sure that you are securing your financial future and protecting your loved ones by having an estate plan that includes the following.
Revocable living trust
A revocable living trust is a document that documents how you want your property will be handled while you are alive and after you die. The benefit of a revocable living trust is that you can avoid probate court and your property can be distributed quickly. You can change elements in the trust at any time or cancel it completely prior to your death.
Durable Power of attorney
A legal document that gives power to another person to make decisions on your behalf is called a durable power of attorney. The person you grant this responsibility to does not need to be a lawyer and are there for you if you ever become incapacitated in some way while you are alive. The agent you name in the power of attorney document will be able to handle financial dealings, real estate transactions and other legal decisions on your behalf.
Failing to name beneficiaries in your estate plan means that you are leaving it up to the court to decide how your property is distributed. Since a judge will not be aware of what your intentions or what your wishes were, it is likely the court will not handle the distribution in a way that you may want.
Letter of intent
Just as you may have a set of instructions with a new product you buy at the store, a letter of intent is a document that you create for your executor or beneficiary for after you die. In it, you will want to define what you want to have happen with assets and property. You can also use the letter to give instruction on special requests and funeral arrangements.
By creating an advance directive, you are outlining how you want decisions made about your health care if you happen to become incapacitated and are unable to speak your opinion. When you create this directive, you are putting down in writing how you want procedures handled for your health care. When you use both a durable power of attorney and an advance directive together, you can ensure that you will be receiving the care you desire. If you just have durable power of attorney, you are leaving critical decisions to be made by someone else.
As you can see, there is more to an estate plan that just making decisions on where all your assets will go after you die. A comprehensive estate plan not only takes care of your family and beneficiaries but will also have provisions for what you want to have happen if you become temporarily or permanently incapacitated.