Most people believe that having a will is enough to ensure that all their assets will go to their desired beneficiaries after they pass away. While a will is a good starting point for expressing your wishes when you die, some assets are best secured through separate means. Aside from your will, a comprehensive estate plan includes a living will, a power of attorney and trusts.
What is a living will?
An estate plan is not just applicable for when you pass away. You can formalize your health care and medical decisions when you can no longer do so. A living will outlines your wishes regarding medical treatment, life support, resuscitation and organ donation. You can also designate your healthcare proxy through a living will, who will make healthcare choices on your behalf.
What is a durable power of attorney?
Similar to how a healthcare proxy takes care of your medical decisions, a designated durable power of attorney takes care of your financial decisions when you become physically or mentally incapacitated. A durable power of attorney is a document that lets you name a trusted person to protect you and manage your financial affairs during illness or disability.
What is a will?
A will is the most common legal document that outlines how you want to distribute your assets after you pass away. A will could also indicate the guardianship of your children, pets or other responsibilities you have. In your will, you can identify a trusted person to be your executor, the one who will carry out your wishes. Having a will protects your family from going through the complications of probate when you die “intestate” or without a will.
What are trusts?
Trusts hold assets on behalf of your beneficiary. For example, you can set aside a trust specifically for your child’s education. Your beneficiaries receive your assets according to how you specified them in your trust. Having trusts can help minimize taxes and avoid probate.
Estate planning is not a one-time decision; you can review and update it regularly or when a significant life event happens. Everyone has unique situations, and having the support of an experienced estate law attorney could ensure that your needs are addressed. Having a comprehensive estate plan guarantees that your wishes will be followed. You can have peace of mind knowing that you will leave your loved ones and your assets protected.