An estate plan helps ensure that your assets go where you want them to and that your wishes come to fruition after your passing. Estate plans can contain many different elements.
However, most people include many of the same fundamental components in theirs.
A last will and testament
A Last Will and Testament is the cornerstone of any estate plan. It outlines your wishes for the distribution of your assets, appoints an executor to manage your estate and names guardians for any minor children you have. Without a will, the state’s intestacy laws govern asset distribution, which may not align with your preferences.
Durable power of attorney
A durable power of attorney authorizes someone you trust to make financial decisions and manage your assets if you suffer incapacitation. This document is especially important for ensuring that your financial affairs continue to run smoothly, even if you become unable to manage them yourself.
Advance health care directive
This document allows you to appoint someone to make medical decisions on your behalf if you are unable to do so. It also outlines your preferences regarding life-sustaining treatments and medical care, ensuring your wishes come to fruition.
Living will
You may use a living will to outline your preferences regarding treatments, resuscitation and organ donation, among related areas. This document provides clear guidance to healthcare providers and family members during difficult times.
Creating a simple estate plan does not have to take considerable time or money. However, 67% of Americans fail to create one. Taking the time to create an estate plan helps you avoid leaving important matters to chance while allowing you to maintain control over many aspects of your life and legacy.