Making a good estate plan doesn’t just protect you by creating a legacy that people will treasure. It also protects the people you love by allocating property that they can use to provide for themselves.
If you don’t plan your estate carefully, people could challenge it or your wishes might wind up neglected or undermined. Including the right documents in your estate plan will create the best safety net for you in the event of a medical incident and after your death.
1) A last will
For many people, the term “estate plan” is synonymous with “last will,” but they are actually distinct. An estate plan is a collection of all the documents pertaining to your incapacitation or death, while a last will is a specific document outlining what you want done with your personal property and how you want people to care for your dependent family members. Your last will discusses the disposition of assets and can also help establish the guardian for minor children.
2) A durable power of attorney
Sometimes, you get hurt or fall ill but don’t die. If you end up in the hospital in a medically-induced coma, powers of attorney can let other people make medical choices for you, or manage your personal finances or small business. Carefully drafting the document so that it continues to hold authority even in the event of your permanent incapacitation maximizes the benefit of a power of attorney.
3) An advance medical directive or health care proxy
Your financial issues won’t be the only concern if you are in a coma or have a stroke. You also need people to handle your medical needs. You can leave instructions detailing medical preferences and even authorizing specific care with your primary care physician. You can also empower family members other than your spouse to make medical decisions on your behalf.
4) A letter of intent
You can only include so much personal information in your last will, but there may be details that you need to explain. Including a personal letter or letter of intent in your estate plan will give your beneficiaries or executor more insight into your state of mind while estate planning.
Such a letter can be important if you need to leave detailed instructions about the management of certain property or the reason behind your decision to disinherit someone in your immediate family.
The more complex your family or financial circumstances, the more detailed you may need to be in your estate planning process. The sooner you start, the longer you can enjoy the peace of mind that comes from knowing you have protected yourself and the people you love.