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5 Essential Components of an Estate Plan

By January 21, 2020 January 22nd, 2020 No Comments
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Item #1: A Will & Trust

When you hear the term “estate plan,” you probably think about a last will and testament. You may also assume that only wealthy people have wills or trusts, and that there is no point in creating wills and trusts if you don’t possess significant financial assets. Actually, a will is not all about money—it is merely a set of instructions as to how you’d like your property or possessions distributed after you pass away. Similarly, a trust is a useful tool that allows you to transfer financial assets or real estate to your heirs in a streamlined and tax-effective way. The clearer and more precise the language in your will is, the more you can prevent disputes among your beneficiaries when the time comes.

Item #2: Durable Power of Attorney

It can be unpleasant to think about a future where you are no longer mentally or physically able to make legal decisions for yourself. By choosing a trusted individual to serve as your durable power of attorney, you can rest easier knowing that, should the unthinkable happen, this advocate will step up and make decisions on your behalf that protect your best interests. A durable power of attorney document allows the designated agent to legally act on your behalf in matters of real estate, finance, business, and other specified areas.

Item #3: Identification of Beneficiaries

There are some possessions, such as retirement benefits, that are handled and passed down independent of what is stated in the will. Check with your insurance and retirement plans to make sure you’ve nominated a beneficiary (and, in many cases, a contingent beneficiary). Without clear designations, the court will likely have to step in and make a decision, which may not align with your intentions.

Item #4: Healthcare Power of Attorney

While we rarely want to think that an accident or similar tragedy should befall us, it’s critical that we take steps now to make sure our medical preferences are clearly documented. A healthcare power of attorney allows a trusted person of your choosing to honor your healthcare wishes and make important medical decisions for you, should you become unable to communicate. No matter what the future holds, you can trust that your preferences for what types of interventions or treatments you would like will be known and honored.

Item #5: Assigning Legal Guardians to Protect Your Children

If you have children, it’s imperative that you make sure they will be supported and cared for if you and/or your spouse or fellow parent are critically injured or pass away. Take some time to select a trusted individual (a sibling, close friend) who can parent your child according to your wishes. Without a guardianship designation in place, the court will step in and decide who will receive custody of your children, meaning that the individual they select may not be someone you would have picked. Make your preferences known by including guardianship designations in your estate plan.

While these five components are a great place to start, a knowledgeable estate plan attorney will work with you to create a customized estate plan that is tailored to address your unique needs and goals. Reach out to the warm and experienced legal team at Legacy Law Group by calling (509) 315-8087 today.