Creating a strong, comprehensive estate plan can give you peace of mind and help your family avoid probate in the future. The best estate plans do not just include wills, but also other important elements.
Whether you own a farm, are a new business owner or need to plan for family assets, here are five elements your plan should include.
The Last Will and Testament is the most common element clients think of during estate planning. Your will must name specific beneficiaries to inherit your assets and properties. It can also name guardians for any minor children, plans for pets, business directives and other important instructions.
Creating a trust includes naming a third party (trustee) to manage your assets for you or for minor beneficiaries until they come of age. There are many different types of trusts: revocable living trust, irrevocable trust, charitable trust, special needs trust, asset protection trust, etc.
- Power of attorney
A power of attorney designates an agent to have the legal authority to make your decisions on important legal or financial matters if you become incapacitated. Including a POA in your estate plan can ensure someone you trust takes over for you in times of need.
- Health care directives
Do not force your loved ones to make difficult medical decisions on your behalf if you get into an accident or otherwise cannot communicate. Create health care directives as part of your estate plan to describe your exact medical wishes.
- Personal representative
You should name a personal representative (also referred to as an executor) to administer your estate. This person will carry out your last wishes according to the directions you leave behind in your estate plan. Appointing a representative will prevent the courts from having to do so for you.