Four important estate planning documents (aside from a will)
This article looks at four estate planning documents that are important and that aren’t wills.
A will is probably the most basic and most important estate planning document one can have. However, as the Houston Chronicle points out, the focus on a will often leaves many people under the assumption that a will is the only estate planning document they need. The truth, however, is that a will is only one part of a larger estate plan and for those who want to truly protect their interests and wishes, it is important to have an array of estate planning documents taken care of. Below are just four estate planning documents to consider aside from a will.
Power of attorney
Powers of attorney take a number of different forms, but in all cases they allow a person to take certain decisions on one’s behalf if one becomes incapacitated. A health care power of attorney, for example, allows a designated person or persons to make medical related decisions on one’s behalf. A durable power of attorney, meanwhile, covers financial decisions. A power of attorney can also be set up to only take effect when a triggering event, such as incapacitation, occurs.
Most people have some idea of the sort if decisions they would like taken on their behalf if they become incapacitated. A living will allows them to direct those decisions beforehand. This important legal document allows an individual to put into writing their wishes regarding medical treatment and life-sustaining care should they no longer be able to express those wishes themselves.
As NerdWallet points out, far too many people overlook the importance of keeping beneficiary designations up to date when taking care of estate planning needs. Beneficiary designations for 401(k)s, IRAs, pension plans, insurance policies, and other financial assets should be reviewed regularly. Ensuring beneficiary designations are up to date will help ensure that they pass on to heirs more efficiently.
By placing assets in a living trust, people can still use those assets while they are alive. The advantage of a living trust is that it allows one’s heirs to avoid probate after one’s death. By avoiding probate, the distribution of assets takes a lot less time and one’s privacy is better protected.
Estate planning help
While it intimidates many people, estate planning does not actually need to be difficult. With the help of an estate planning attorney, anybody can learn about what they need in order to make sure that their wishes in terms of financial, medical, and other affairs are taken care of. An experienced estate planning attorney can provide clients with peace of mind so that they can feel better about ensuring that their families and loved ones are protected both today and for the future.