What are estate planning documents?

Estate planning documents outline the goals and wishes of a person no longer with us. An attorney creates estate planning documents that make suggestions for the individuals. It is important to note that estate planning documents are not legally binding. Estate planning documents are only suggestions, and suggestions are not law.

What are the five estate planning documents?

The five estate planning documents are the will, power of attorney, living will, health care proxy, and durable power of attorney.

A will is a document that names who will inherit your property, what will happen to any jointly owned property, and what should happen to your minor children. A living will (also called a health care directive) tells your doctors what kind of care you want or don’t want if you can’t speak for yourself. A durable power of attorney gives someone you trust the ability to make decisions about your property or finances if you can’t make them yourself. 

A healthcare proxy names someone to make medical decisions for you if you can’t speak for yourself. A letter of instruction tells your family or other loved ones what you want to be done with your remains.

An estate plan is a set of documents that help the person making the plan determine how they want their assets distributed after they die. The five crucial estate planning documents are a will, a power of attorney, a living will, a medical power of attorney, and a letter of instruction. Therefore, a will document specifies the assets after a person’s death. A power of attorney allows the person to appoint someone to act on their behalf in certain situations.

Last will (LW&M)

This legal document serves as the cornerstone for an effective estate strategy. Your attorney will propose a will-based or a trust-based estate plan after you begin your estate planning journey.

Living Trustee

This legal agreement made during your lifetime allows you to transfer assets into a trust for your beneficiaries without going through probate court processes. It is also known as a revocable living trust. There is no minimum asset size required to establish a living trust. On the other hand, individuals and families with vast, complex estates and several beneficiaries use it more frequently.

You are not limited to selecting a spouse or a family member as your agent. Being “durable” indicates that the organization will continue to function even if you become incapacitated and unable to manage affairs independently. On the other hand, a broad POA would become ineffective the moment the person becomes disabled.

Durable Power of Attorney for Property (POA)

This legal agreement delegated authority to someone else, known as your agent, to act on your behalf. You can specify a primary and backup agent if the primary cannot serve. The will designates Spouses as each other’s agents.

Healthcare Power of Attorney (POA)

As with the Durable POA, you appoint another individual as your agent. In addition, you can specify a primary and backup agent if the primary cannot serve. Whereas the Durable POA is concerned with financial problems, this legal instrument is concerned with healthcare decisions. The will designates most spouses as each other’s agents. However, you can choose someone other than a spouse or family member.

Living Will

The Advanced healthcare directive is a legal instrument specifying end-of-life care instruction in a living will. Sometimes, there is a mistake of a will for a final testament and a living will where these two documents serve distinctly. 

Conclusion

There are many distinct trusts, each serving a particular purpose and achieving different objectives. The frequently used trust in estate planning is the revocable living trust. You can plan for continuous administration of your financial affairs throughout your lifetime (for example, if you become incompetent), at your death, and even for future generations by placing assets into a revocable trust.

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Now, as you might already know that estate planning is all about securing your assets for the future of your kids and the family. You have worked long and hard and now amassed some possessions but what if you die? One of life’s few guarantees is that one day we will die and there is no running away from it. Who will inherit our belongings? Will it be your spouse, children, family member, close friend or will you leave everything to a charity? The choice is your but only through proper estate planning.

What does an Estate Plan Include?

An estate plan can include a lot of elements and you must know learn more about them. It is really very important to be educated on the subject before stepping moving forward with creating your estate plan. So, here in this blog, we are going to talk about the things which an estate plan may include.

Estate planning Components

Will/Trust

A lot of us imagine a Will/Trust to be related to a person who is dying. Some also believe that a Will/Trust is only for the wealthy or those with lots of real estate. However, having a Will/Trust just means that you wish to protect your belongings and safeguard them for the person or organization of your choosing to inherit them when you are no longer around.

Power of Attorney

Let’s say you are running a small or even big company and something happens to you in which you aren’t able to run a business then what’s next? Who is going to handle your business? Well, in that case, you will need to have someone with “Power of Attorney”. You can pick that person whom you will empower to handle your finances in such an event.

Beneficiary

If you wish to have a say in who stands to inherit your belongings you must appoint a beneficiary during your estate planning. Each state has their own set of laws if you don’t appoint a beneficiary the courts will appoint them based on state law.

Letter of Intent

It is very important to have the letter of intent because that can contain your wishes which you want to tell your beneficiary. You must know that the purpose of this letter is to tell your beneficiary about your plans regarding your asset or any other instructions such as where you are to be buried.

Healthcare Proxy

It is simply like the power of attorney but with only limited power. You can see that the “Health” word is attached to it which means that the person who will be your Healthcare proxy is going to decide your health-related decisions when you aren’t able to take that kind of decision by yourself.

Guardianship

You must know that guardianship is a very important element of estate planning. It comes in handy when you want to pick someone to be your kids’ guardian after your death. Now, if you won’t pick any then the court will pick for you and that person could be anyone from your family even potentially a family member whom you don’t even trust.

A living Will

It is one of the most important components of estate planning. You must know that “A Living Will” comes in handy if you want to take care of yourself even when you aren’t able to do it. It does help in many scenarios and one of them is like falling in a coma when you aren’t able to make your decision then “A Living Will” dictates your wishes of how you wish to be cared for.

In the end, planning allows you to make decisions about your future and at times that of your loved ones. Having a plan is important. When you are ready our firm offers free consultations, come in and learn more of how you and your family can benefit from a good estate plan. Call us today to schedule your free consultation with one of our experienced attorney’s.

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