At first, estate planning may feel like a daunting task, since there is so much to consider. The decisions that you must make are crucial ones, as they lay out your instructions for how you want your assets to be handled after you have passed on. As an estate lawyer from W.B. Moore Law explains, here are the five main components of every estate plan.
#1 Will and Trust
Many people have a misconception about wills and trusts, thinking that only the rich and famous need such documents. But even if you think you don’t have enough assets to devise an estate plan, chances are that you do. Even sentimental items that you currently own but may not have much value monetarily are worth ensuring that they are handed down to those who love you the most. Through an estate plan, documents to protect your assets and the future of your legacy can be established.
#2 Durable Power of Attorney
Every single one of us has legal and financial responsibilities to handle each day. We manage our bank accounts, pay bills, and fulfill any number of other ordinary tasks. If we suddenly become unable to handle these tasks because of injury, illness, or death, chaos may result. Bills may not get paid, deposits may not go into our accounts, and other duties won’t be met. Through a durable power of attorney, someone you choose can handle your legal and financial affairs if you become unable to yourself, either temporarily or permanently.
#3 Beneficiary Designations
While writing your estate plan documents, you have to name beneficiaries. These can be friends, family, or charity organizations that you want to have a piece of your legacy upon death. Beneficiaries must be named and designated certain assets, so that they can be distributed directly. Who you choose as a beneficiary is a personal decision, but an important one, as these people will receive a part of what you have worked your entire life to build and accumulate.
#4 Living Will and Advance Directives
Advance healthcare directives and living wills are legal documents that describe your preferences for medical attention if you are terminally ill, seriously injured, near death, have late-stage dementia, are in a coma, or otherwise unable to make choices for yourself. The advanced healthcare directives or living will will see to it that you get the care you want and are not provided treatments that you don’t want to have. This can relieve your family from making decisions during a crisis and reducing disagreements.
#5 Healthcare of Medical Power of Attorney
Similar to a durable power of attorney, a power of attorney for medical allows someone to make choices on your behalf if you are unable to for yourself. A healthcare directive or living will does not preclude the necessity for a medical power of attorney, since situations may happen that are not outlined in the living will, and will require decisions made by the person you have appointed for that role.