Your estate plan is where your loved ones will turn to find out what you want to do with your assets when you pass away. There are several components of an estate plan, but some individuals are surprised to find out that some of them are used before you pass away. Together, all of the following points create a comprehensive estate plan.
The will and trusts work to transfer assets to your loved ones when you pass away. Some trusts provide protections for the assets in them, and all trusts enable your loved ones to keep their inheritance out of public knowledge. The will helps to transfer assets that aren’t included in the trust, but you can’t include ones that are subjected to a payable on death designation. This designation is often included in documents for bank, investment and retirement accounts.
You also need to set up plans for your finances if you can’t make these decisions on your own. The powers of attorney for finances establishes a person who can handle things like paying your bills or selling assets if you are incapacitated.
Your health care is another area that you need to think about. You should get a living will established, so your medical care team has a written outline of what you want or will bypass. You also need to have a health care proxy, which is set up through the use of a power of attorney designation. This person makes choices for your health care if you are incapacitated and the matter isn’t covered by your living will.
If you have children, you also need to plan for them. Naming a trustee and a guardian are the two primary considerations for this. You will still need to address the other components of an estate plan, too.