A will is usually the foundational document of an estate plan. Having a will prevents you from dying “intestate” and having your assets distributed to your relatives in ways that are determined by the state (regardless of whether you wanted them to have anything).
A will, however, should typically not be the sole document in an estate plan. A few other broadly-applicable estate planning tools can help to safeguard your wishes and your assets while you’re still alive and after you’re gone.
Living trust
People often place their more valuable assets, such as homes, cars and bank accounts in a living trust while they’re still alive and well. This kind of trust allows you to maintain control of them and then leave them to beneficiaries without the need to go through probate. This can save your loved ones considerable time and money. It can also help keep your estate private, since probate court filings aren’t needed to oversee trust administration unless some sort of concern arises.
You’ll still need a will to cover any assets not included in the trust and for other purposes, but the trust can be the cornerstone of your estate plan. It’s easier to set up and maintain than people tend to realize. And, you can move assets in and out of your living trust as you purchase and sell them.
Advance health care directive and power of attorney
An advance directive is important for any adult to have in place, regardless of their age or physical condition. It allows you to designate your wishes for life-prolonging and other medical care if you’re seriously injured or ill and unable to communicate. You can designate things like under what conditions you do or don’t want to be kept alive through artificial means. You can also make your wishes known regarding organ, tissue and other donations for transplant and research.
Along with this directive, you should give someone durable power of attorney (POA) over your health care. This allows them to talk with your medical team and advocate for the wishes you’ve outlined. It’s crucial to choose a capable person for this responsibility and to make sure they’re comfortable potentially having to take it on. Even if you have a large family (and maybe especially if you do), designating one person to have decision-making responsibility can help prevent family battles.
These are just a few of the estate planning tools that can benefit you and your loved ones. By seeking estate planning guidance, you can learn more about them and others and choose the ones that best fit your needs.
