An estate plan is so much more than “just a will.” In fact, a good estate plan is a comprehensive set of legal documents and strategies that help ensure your assets are protected, your health care and end-of-life wishes are respected and your loved ones are taken care of after you pass away or become incapacitated.
Here are some essential elements of an estate plan:
A will
Your will is a legal document that describes what you want to happen to your assets after you die, as well as directives regarding the care of any minor children or other dependents. For most people, it’s probably the most familiar part of an estate plan
A trust
A trust is a legal entity that can hold assets, including real estate, for your beneficiaries according to the framework set in the trust’s documents. Trusts can help avoid probate and provide greater control over your legacy.
Powers of attorney
These legal documents designate someone to make financial or legal decisions (or both) on your behalf if you become incapacitated at any point before your death.
Advance directives
A legal document that outlines your medical treatment preferences if you are unable to communicate them yourself. These can help guide your medical power of attorney’s actions and better ensure that your end-of-life wishes are followed.
Guardian designations
If you have minor children or other dependents who require your care, you can designate a guardian for them in the event of your death or incapacity.
Designated beneficiaries
Retirement accounts such as 401(k)s, IRAs and pensions are typically a significant portion of many people’s estates. You should ensure that you have designated beneficiaries for each of your retirement accounts and that they are updated regularly so that the assets pass directly to your chosen heirs without delay.
Good estate planning takes into account your goals for yourself, your loved ones and your assets – and they’re often complicated to get right. Experienced legal guidance can make sure that you fully understand your options and develop plans that truly work for your needs.