You don’t want to be like most people and make the mistake of thinking that you don’t need an estate plan. If you do, then your assets could end up subject to the powers of the state, meaning that your assets will be divided according to state law. This, of course, could be contradictory to what you want, thereby disserving your loved ones.
We understand that navigating the estate planning process can be exhausting. That’s why a lot of people stick with a basic will. But you’ll want to create an estate plan that’s thorough enough to suit your needs. What all does that include? Let’s take a look at some of the basic items you’ll want in your estate plan.
The basics that should be a part of your estate plan
Your estate plan can be as complicated as you want it to be. But even if you’re looking to get by with the bare minimum, then you should think about including each of the following in your estate plan:
- A will: This document specifies how your assets will be distributed. Therefore, a will is often a cornerstone piece of an estate plan, ensuring your loved ones receive the assets that you want them to have.
- Key trusts: There are a lot of trust options out there, which can leave you confused and intimidated. But you don’t have to have a complicated network of trusts. Sure, multiple trusts might give you the best advantage, but you can simplify matters by focusing on those trusts that matter most to you, such as those that alleviate tax consequences or protect your wealth from misuse.
- Letter of intent: Not all estate planning documents focus on your assets. A letter of intent specifies how you want your final arrangements to play out, such as your funeral service and your burial. It can also help you clarify why you’ve developed your estate plan the way you did, and what you hope your loved ones will accomplish with their inheritances.
- Health care power of attorney: Incapacitation is never expected, and it can leave you in a difficult position where you’re unable to make decisions for yourself. That can be scary to think about, especially when you consider your medical needs. Through a health care power of attorney, you can specify who will make decisions for you if you’re unable to make them for yourself, and you can also specify what kinds of treatment you do and don’t want.
- Power of attorney: A regular power of attorney allows you to name someone to make financial decisions for you if you become incapacitated, which is critical since these decisions can have a direct impact on your estate. Just make sure you choose someone you trust.
- Guardianship designation: If you have children, then you’ll want to make sure they’re well cared for once you’re gone. In your estate plan, you can specify who will serve as your children’s guardian. If you don’t have a designation in place, then your family members could end up fighting over your children, which can shatter existing relationships.
Find the estate planning path that’s right for you
One of the best things about estate planning is that you can custom-tailor it to suit your needs. But before you make those important estate planning decisions, you should know your options and what each estate planning tool can do for you. That’s why it’s important that you start reading up on the various estate planning vehicles that you could use. Our blog is a great first place to start educating yourself in this regard.
