No matter how large or modest you live, having an estate plan is imperative. An estate consists of everything you own and will benefit a loved one or beneficiaries in your will in the near future. Estate planning is for everyone, even if you don’t plan extensively.
Estate planning is a systematic approach that makes it easy to organize your personal and financial affairs. A solid estate plan will come in handy in the event of your demise or mental frailty. Besides having peace of mind, you know your family is safe, and they can easily access your assets.
An estate plan will make your wishes known, save your family from making difficult decisions and avoid estate taxes. But do you know what estate planning entails? There is no doubt the whole process may seem daunting, but then again, it is something we all need to pursue.
An estate plan should be well-prepared, and there are basics to hold at your fingertips. Estate planning documents are essential and will clear all the hassle. These documents form the most reliable representation of your wishes.
Here are the essential estate planning documents to know:
- Last Will and Testament
A will specifies who you want to inherit certain property and assets after you die. This will include your physical assets such as real estate, personal possessions, and intangible assets such as investments and bank accounts.
Those who will receive these properties are called beneficiaries. You will ensure they are well taken care of after your demise.
- Beneficiary Designations
These are some of your possessions you can pass to your heirs without being controlled by the will. It is important to maintain a beneficiary on such an account.
If you don’t name your beneficiary or are deceased, the court has the mandate to decide the fate of your possession or funds. Unfortunately, if the court is not aware of your situation, it will be hard to make the same decision you would have made if alive.
- Letter of Intent
This is simply a document left to your beneficiary or executor of your will. It defines what you want to be done with your funds or particular assets after your mental incapacity or death. Your letter of intent may also include your funeral wishes and other special requests.
- Healthcare Power of Attorney
In the event of your mental incapacity, a healthcare power of attorney designates a spouse or family member to make decisions on your behalf. These are basically healthcare decisions that will affect you or your family in one way or another.
The individual to execute this document should be someone you trust, share identical thoughts, and can make the same decisions you would. This is someone who will have your life in their hands. You should have an attorney you can trust if your condition worsens or you are unavailable.
- Guardianship Designations
Many people may overlook the idea of having an appointed guardian. However, it is vital if you have small children or are considering having kids. The guardian you choose should be someone you trust, willing to raise your children, financially stable, or shares your views.
If you don’t have this document, the court could rule your children be taken care of by a family member. Unfortunately, this is someone you wouldn’t have chosen. In extreme cases, the court may rule your minors become foster children.
- Financial Power Attorney
With a financial power attorney, you give someone the legal authority to manage all your finances and property. These tasks will include making bank deposits, paying your bills, and managing your real estate property. Your healthcare and financial agent can work together to provide the necessary help you need.
An estate plan is a great approach and imperative to you and your loved ones. Your estate planning documents checklist should stand out and present all the necessary information your family or legal representatives need. If you don’t know how to prepare your estate plan documents, don’t stress. Seek professional help and ensure the consultation and planning is more organized and efficient.