If a person becomes incapacitated, it can be difficult for others to help with that person’s medical and financial decisions and care unless someone is given a power of attorney. Similarly, an advance health care directive will let a person’s family and friends know whether to pull the plug or make other end-of-life decisions if the person is not in a position to make that choice.
Estate planning can also include obtaining insurance to protect loved ones. Disability insurance can pay out to an individual and his or her family if the person becomes unable to work, and life insurance will pay out to designated family or other beneficiaries if a person passes away. A lesser-known type of insurance is key person life or disability insurance, which can name a business as a beneficiary. This means that if a business owner dies or becomes incapacitated, certain business expenses may be covered for whoever takes over.
Before speaking with an estate planning attorney, it is good to make a list of all assets owned, including retirement accounts. It is also a good idea to think about who to name for positions like power of attorney or executor of a will. Business owners should consider who, if anyone, they want to take over their businesses if something happens to them.