If you think of an estate plan as nothing more than a last will, it is very easy to put off creating one. After all, there are state laws that will divide your property among your closest family members if you die without a will.
However, a good estate plan is more than just a last will. While it does include a will, it will also include other important documents. Learning a bit more about what you might want to include in your estate plan can help you see how the process protects not only your heirs but you as well.
A living will takes effect after an accident or medical event
Imagine that you get into a car crash or suffer a stroke. You are left unconscious or with brain damage that prevents you from communicating with others. All of a sudden, you are at the mercy of other people’s decisions for your medical care.
If you haven’t made your preferences known to others and empowered someone to act on your behalf, you have no control over what care you receive. A living will is a collection of documents that goes into effect if you experience incapacitation.
The documents might include an advance medical directive that discusses your medical preferences, as well as HIPAA paperwork so that your loved ones can access your medical documents. You will also likely want either a medical power of attorney or a health care proxy to empower someone else to authorize medical care on your behalf.
Trusts can help you structure your legacy carefully
Do you want to start a scholarship fund or donate money to your favorite wildlife charity? A trust is an important tool for those who want to leave a lasting or charitable legacy.
You can also use trusts to ensure that those who most rely on you will have support when something happens to you. A special needs trust can help you provide resources and support for a loved one with a debilitating condition both now while you are alive and after you die.
A pet trust could be another important inclusion. These documents help ensure that there are resources to provide for your companion animal and legal protections so that your pets will be taken care of after you pass on.
Unique situations may require additional planning
Do you own and operate a business? You may also need to put together a succession plan so that someone can fill your role when you are no longer able to. If you don’t have a spouse or co-signers on your most important financial accounts, you may also need to execute a financial power of attorney so that someone could pay your bills or manage your house if you wind up incapacitated.
Discussing your family circumstances, your property and the legacy you want to leave behind can all help you decide the best steps to take when estate planning.