Whether you have a small, medium or large estate, estate planning is essential for the long-term management of your assets. It is also most helpful to create an estate plan before there is a legal issue, such as with health-related directives.
Here are three key elements you should consider having in your estate plan.
Your last will and testament
A will is the foundational piece of your estate planning. Even if you have a trust or plan to create a trust, it is still necessary to have a will in some cases.
Your will can distribute your assets in line with your wishes after death. It can also appoint guardianship for any minor children who survive you.
A power of attorney for your assets
If you become incapacitated or deemed incompetent, your designated principal would execute your power of attorney. A power of attorney can allow a principal to make financial decisions on your behalf, including those related to your retirement assets.
Many people make their spouse or partner their power of attorney. For this reason, it is vital to update your power of attorney if you get divorced.
A healthcare power of attorney for your care
The person designated as your healthcare power of attorney does not need to be the same person given power of attorney over your financial affairs. A healthcare power of attorney designates a person to decide your medical care if you become incapacitated.
Estate planning is an effective way to decrease the risk of conflict with beneficiaries after your passing. It can also give you contentment and confidence for your future.