A well-designed estate plan becomes a safety net in the event of your incapacitation or death. It can ensure that your assets are distributed in accordance with your wishes and that your loved ones are well cared for, even when you are not around to do so yourself. What makes up a well-designed estate plan?
The essential components of a well-designed estate plan may include:
- A will outlines wishes for asset distribution upon death, be it valuables such as cars or real estate, or more sentimental possessions like an heirloom chair or recipe book. If it is yours, you can put it in a will. A will can also appoint a guardian for minor children or name an executor to administer your estate.
- A trust allows a person to transfer assets to the management of a trustee for the benefit of the trust’s beneficiaries. Trusts can provide for minor children and possibly avoid the process of probate.
- Financial Power of Attorney. In the event of incapacitation, this document gives a trusted family member or friend the power to make financial and legal decisions on your behalf while you are unable to make them for yourself. This includes investments, managing your real estate holdings or even paying your taxes.
- Medical Power of Attorney. An agent under Medical Power of Attorney may make your medical decisions if you cannot make care decisions on your own. An agent under Medical Power of Attorney may speak with your doctors, approve or decline treatments and access medical records.
- Advance Directive. This document outlines your wishes for specific medical treatments such as resuscitation, organ donation or other end-of-life decisions.
- Beneficiary Designations. You can name beneficiaries for life insurance policies, retirement accounts and other assets.
- Business Succession Plan. If you own a business, whether it is full or partial ownership, large or small, you need a plan for the transfer of ownership. Whether it is due to retirement, disability or death, a business succession plan outlines what will happen to your business if one of these events occurs.
A well-designed estate plan consists of multiple documents. The ones that are right for you will depend on your unique situation. To learn more about estate planning and which parts are best for you, call Brown Law Firm, LLC at (303) 339-3750.