Many people assume that an estate plan is only necessary for wealthy individuals, but this isn’t at all the case. Instead, adults of all wealth levels should have an estate plan documented.
Your estate plan does several things. The one that most people think about is that it outlines who gets your assets when you pass away, but it also provides a plan for what happens if you become incapacitated.
Components you should have
At a minimum, you need to have your will written, as well as any trusts that you’re going to establish. You should have a durable power of attorney set up so someone can handle your finances if you become incapacitated. You also need to have a health care power of attorney so your chosen person can make medical decisions for you if you’re incapacitated.
You also need to have beneficiary designations, a letter of intent and guardianship designations all set up. Your beneficiary designations are for things like your retirement accounts and bank accounts that can pass down to people without having to be put in the will. The letter of intent can provide additional details for your heirs, such as what funeral arrangements you want.
Only parents who have minor children will need to have a guardianship designation. This person should be willing to raise your children in the way you want them raised, and they should be in the position to do this. If possible, discuss this with them in advance so they know what to expect.
Virginia residents who need to get an estate plan together should get started right away. Working with someone who’s familiar with this process can help to make it easier.