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5 essential elements of an estate plan

On Behalf of | Jul 19, 2021 | Estate Planning

Estate planning looks different for each individual and may be straightforward or sophisticated, depending on the size of your estate and the complexity of your final wishes. 

In the absence of an estate plan, your family may become responsible for decisions they should not have to make. It is better to make your wishes known. 

1. Will

Many people mistakenly believe that unless they have a large estate, they do not need a will. Some of your assets will already have a designated beneficiary. However, without a will, your state of residence will distribute your assets for you without the benefit of understanding your family dynamics and could lead to conflict. 

2. Financial power of attorney

A financial power of attorney gives another individual access to your financial assets should you become incapacitated, making it possible to release funds needed for your care. That person will also be able to pay your bills and handle other financial responsibilities. 

3. Medical power of attorney

A medical POA identifies a person responsible for making healthcare decisions on your behalf, should you become unable to make them yourself. You may also want to create an advance directive that states your wishes, such as those regarding life support. 

4. Trust

A trust is a legal entity that can become the owner of your assets. It can be beneficial not only for tax purposes but sets the assets apart from the probate process. 

5. Guardianship

If you have dependent children or others who rely upon you for care, an important element of estate planning is documenting who will take care of them in your absence. 

Documenting these important decisions while you can do so on your own can save your family from unnecessary stress and conflict.