Estate planning is a crucial process that ensures an individual’s assets and healthcare preferences are handled according to their wishes upon their passing or if they become incapacitated. This process involves several key components, each serving distinct functions within the plan.
Understanding these elements can help create a comprehensive estate plan that addresses all necessary aspects of assets and health care decisions.
Wills
A will outlines how an individual’s assets should be distributed after death. It specifies beneficiaries for various assets, names an executor to manage the estate’s affairs and can designate guardians for minor children. Without a will, an individual’s estate is distributed according to state laws, which may not align with their wishes.
Trusts
Trusts provide more control over how and when assets are distributed. Unlike wills, trusts can offer the advantage of avoiding probate. These come in various forms, including living trusts, effective during the grantor’s lifetime, and testamentary trusts, established upon the grantor’s death through a will.
Powers of attorney
A power of attorney grants someone else the authority to make decisions on an individual’s behalf if they can’t do so themselves. This can cover financial decisions, such as managing investments and paying bills, or health care decisions, depending on the type of power of attorney established.
Letter of instruction
A letter of instruction isn’t legally binding, but it provides valuable guidance for the executor and beneficiaries. It can include information on the location of essential documents, funeral and burial wishes and instructions on managing digital assets.
A comprehensive estate plan makes it easier for loved ones to follow the creator’s wishes. Contact our law firm to create your estate plan today.
