While you are not legally required to have an estate plan, the practice is important in caring for your estate and your family. Without it, your estate will go through probate and the courts will decide what happens. As you consider creating an estate plan, begin by talking with your attorney about the different documents you may need. Here, we will walk you through the main pieces that you may encounter:
Will – A will is the foundation of your estate plan. The document can address a wide variety of issues, including distribution of property and care for your children. The type of will that you pursue is dependent on whether you decide to create a trust, meaning that it may deal with all assets or only the ones not addressed in your trust.
Trust – There are many different types of trusts that may be beneficial for your situation. A trust is an entity in which you place assets, under control of a trustee and given to a beneficiary. It can help to protect your assets from creditors or taxes and can give your beneficiaries access to the property. There are also specific types of trusts that you may want to learn about, like a special needs trust, which helps provide for a dependent with special needs.
Living will – A living will specifically deals with what will happen if you become incapacitated or unable to make your own medical decisions. It can include an advance health care directive, which allows you to decide what type of medical treatment you would like to have, and a health care power of attorney, who will relay your decisions to doctors and make others for you.
Powers of attorney – Along with a health care power of attorney, you can appoint someone to make financial and asset-related decisions for you if you become incapacitated.
Guardianship – Guardians care for those that depend on you. You may name guardians for your minor children if you pass away, for special needs adults who is unable to care for themselves or even for yourself if you become incapacitated.
While these are only a few of the estate planning components that you should consider, they are important to understand as a base for what you can expect as you begin the process. Talk to your attorney about your specific situation to learn more about what type of estate planning is best for you.