No matter what age you are, it’s a good idea to consider the value of estate planning. Estate planning generally refers to a set of legally binding documents that outline your financial, medical and legal preferences in the event that you are no longer able to make such decisions on your own. They also inform the necessary people and institutions of how you want your affairs and property handled in the event of your death.
What is great about estate planning is the flexibility. You choose what documents you need in order to satisfy your own desires. Depending on how large your estate is, how you want property distributed or how much you value autonomy, you may choose to create a rather complex estate plan. If you are just starting out, there are three primary components you might want to consider.
Wills
Although we often do not know when we will die, we do all understand that eventually, we will. Not having clear plans with how you want your estate settled afterward can leave your family with an immense stress burden. A will communicates how you want your assets divided, establishes guardianship of minor children and can even set up and fund a trust upon your death. You can also designate beneficiaries for life insurance policies, retirement accounts and other investment accounts.
Financial and medical power of attorney
Establishing a financial and medical POA can provide you with peace of mind. If you become partially or fully incapacitated due to an injury, illness or disease, it enables whomever you authorize to attend to your bills and financial activities, insurance matters and ongoing healthcare needs. You can name an individual or an institution, and you donʻt have to select the same person or entity for both financial and medical POA.
Advance directive
In the event that you need life-saving care, an advance directive will ensure that only treatments you authorize will be used. If you have strong feelings about certain procedures including surgeries or intubation, an advance directive will make your preferences known to hospitals and other caregiving facilities.
As you can see, there are many details to consider when creating a comprehensive estate plan. Discussing your goals and wishes with someone familiar with estate law can help you strategize how best to meet your family’s needs.
