Estate planning is not just for the rich. You need an estate plan if you have investments, assets or anything of value. In addition, an estate plan is crucial if you have people who depend on you.
It doesn’t matter how much you have; having an estate plan will help determine the future of your possessions. That said, a comprehensive estate plan will include various documents.
The following are some estate planning documents you should consider:
Last Will
This legal document details your wishes regarding your investments and assets. In addition, it provides specific instructions on how your possessions should be handled upon your death. Finally, the will can specify who you want to leave as your children’s guardian. When choosing a guardian, ensure the person shares your interest, is financially stable and sincerely willing to raise your kids.
Beneficiary designations
These documents allow you to pass assets directly to individuals regardless of the terms of your last will. For example, when establishing a life insurance policy or a retirement account, it is crucial to name a beneficiary and a contingent beneficiary. Failure to have this document means that the fate of your possessions will be left to the court.
Advanced healthcare directive
This document outlines your wishes regarding your health and end-of-life care. This document will only be in effect when you can no longer communicate or make decisions. In this document, you can detail the type of treatments you want, those you want to avoid, and under what situations the directives will apply.
Trusts
A trust can help you avoid the probate process. You can establish a trust and put your assets under it. The assets will be distributed according to your wishes when you pass on. Moreover, a trust can help you avoid estate and inheritance taxes and provide specific parameters for utilizing your assets.
An estate plan is crucial when you want to safeguard your assets and your loved ones. Besides, without it, your loved ones might face significant taxes, and the courts will decide how your possessions will be divided.
