A lot of people think an estate plan simply refers to a will or trust that provides explicit instructions for handling your estate after your death. Wills and trusts are definitely part of an estate plan, but there are many more components. So, what is an estate plan really?
An estate plan is a comprehensive set of legal documents that includes wills, trusts, guardianship, powers of attorney, living wills, medical directives, funeral instructions, and more. This compilation of documents dictates how your assets are distributed, how any dependents are provided for, your medical directives, and other important decisions. The following are the most common documents in a typical estate plan.
Will
A will is a legal document that appoints the person who will be in charge of your estate (the Personal Representative), names your beneficiaries, and specifies how your estate will be distributed.
Trust
A trust is a legal agreement which designates a trustee who will control assets for a beneficiary (such as a minor child), and outlines the rules for how such assets are to be administered. There are a variety of trusts to fit a variety of situations (see the difference between wills and trusts). You can even create special trusts for special needs beneficiaries, pets, guns, to benefit charities, etc. Depending on your assets and beneficiaries, a trust can ensure specific wishes are adhered to.
Durable Power of Attorney
This is a legal document that permits another person to handle your financial affairs and make decisions for you if you become incapacitated, and remains valid until you revoke it or upon your death.
Healthcare Power of Attorney
Like a durable power of attorney, a healthcare power of attorney is a legal document specific to medical decisions. You can specify another person, like a spouse or family member, who can direct medical decisions on your behalf.
Living Will or Advance Medical Directive
Another legal document, the Living Will (or Advance Healthcare Directive) lays out your wishes for specific medical actions that should be taken if you become incapacitated. A common scenario that is outlined in a Living Will is how long you would like to remain on life support and under what conditions you want life support to be removed.
Funeral Planning
This document allows you to specify your wishes for your funeral ceremony and the disposition of your remains.
Letter of Instruction
This is a set of instructions for your family members to help them navigate your estate planning documents, locate assets and accounts (including digital account access), and any general preferences you would like to outline in regards to the administration of your estate.
Ready to create your estate plan (or update an existing one)? The experienced estate attorneys at Wills & Wellness Estate Planning are here to help. Contact us today for a free consultation.
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