Creating an estate plan can offer you peace of mind in knowing that your loved ones will have the support they need in the future. Choosing the right documents for that estate plan allows you to tailor your plan to achieve your unique goals. What estate planning documents should you consider?
Wills are often the foundation of an estate plan.
A will is the most common document used in estate plans. These documents address all of the property that you own, allowing you to name beneficiaries and specify what those people will inherit. You can also name a guardian for underage children in a will, making them especially important for new parents who want to choose the person who will care for their family if they pass away.
Trusts offer greater flexibility and financial benefits.
While a will acts as the foundation of many estate plans, you should also consider the benefits of other estate planning documents like trusts. Because they do not go through probate, trusts can avoid the costs associated with this process and keep the details of your estate confidential. Trusts can also protect your beneficiaries, especially those who receive disability benefits and may lose those benefits if they inherit a large sum at one time.
It is important to remember, though, that a trust can only manage the property and money that you place in trust. Because of this, many people use a will and a trust together to ensure that their estate plan addresses all of their property.
Powers of attorney ensure that your health and finances are protected.
While most people associate estate planning with their legacy, the truth is that an estate plan can also support you if you become incapacitated due to an injury or illness. Financial powers of attorney give someone you trust the ability to make financial decisions in your name if you cannot do so yourself. This includes paying taxes, making investments and selling property.
Healthcare powers of attorney, on the other hand, allow another person to make important decisions about your health care. They can choose your doctor, determine which treatments you receive and make other major medical decisions.
Because there are a wide variety of estate planning documents available to you, it can be important to speak to an attorney about your goals. They can help you explore your options and create an estate plan that supports your loved ones for years to come.