The 4 Estate Planning Documents Everyone Needs
There are many different documents that can go into an estate plan. However, not everyone will require a complex estate plan that uses many of those documents. There are 4 planning documents that everyone should have though: a will, a durable power of attorney, an advance medical directive and a revocable trust.
Will
A will is the document that allows you to state who will receive your property upon your death. You can use your will to appoint someone to represent your estate, and that person will be responsible for distributing your assets. With a will, your remaining assets will go through the court system, which will decide who gets what.
A will also dictates who will care for your children if you pass away when they are still minors. It can assure that they are raised by the person or people of your choice, and help avoid any conflict between your family members.
Durable Power of Attorney
This document will allow your family members to use your finances to care for you if you should become incapacitated. If you are medically incapacitated, your family will face many health care bills, in addition to your own bills. With this document, you allow your family to write checks on your behalf and take care of your finances for you.
Advance Medical Directive: Medical Power of Attorney
An advance medical directive states your medical wishes in the even that you are not able to state them yourself. It also appoints a person to make medical decisions on your behalf, and includes a healthcare power of attorney and a living will.
In your living will you can express your wishes regarding life support or other life sustaining measures. It lets people know you wishes, but does not let anyone speak for you. The healthcare Power of Attorney does designate someone to make medical decisions on your behalf.
Revocable Trust
A revocable trust allows you to provide continued management for your finances during your lifetime, upon your death or even for your beneficiaries. A revocable trust lets your assets avoid probate and reduces the chances that your personal information will become public. There are 3 main components to a revocable trust: a grantor who creates the trust and provides the assets for it, the beneficiary(ies) who receives the assets and a trustee who manages the assets.
Not everyone requires a very complicated estate plan. However, there are 4 estate planning documents that everyone should have. If you need help writing your estate plan or need help with any of these 4 types of documents, please give us a call.
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