Every adult should have an estate plan. Clearly mapping out your desires for how you want your assets distributed after your death lessens the burden on those you leave behind.
While most people think of having a will drawn up, there are a few additional steps to consider in a well thought out estate plan. There are documents to create and roles to assign.
1. A will
A will is the estate planning document most people are familiar with. A will is a legal document that lays out how you want your money and property distributed. You name your heirs and beneficiaries so that they may be easily identified. You name a personal representative, known as an executor in other states, as the person responsible for carrying out your wishes.
2. The designation of a durable power of attorney
Separate from the will, a durable power of attorney is someone you name to carry out financial and legal decisions for you in the event that you become incapacitated. You are free to name the same person as your power of attorney that you name as your personal representative in your will, but they are separate documents. This document takes effect during your lifetime while the will does not become useful until after your death.
3. A living will
A living will details your wishes regarding emergency and end-of-life care. It touches on your preferences regarding heroic measures to save your life and the use of life support. Drawing up a living will as part of your estate plan while you are healthy and cognizant of your decisions makes your wishes clear.
4. The designation of a health care surrogate
A health care surrogate is someone you designate to make medical decisions for you in the event that you become incapacitated. If you have a living will, they make decisions regarding anything that you may not have specified. It is similar to a durable power of attorney but the responsibility of a health care surrogate solely concerns healthcare decisions. Again, you are free to name the same person, but designating these representatives are separate legal steps and require separate documents.
If you have substantial financial interests or property, creating a living trust is also a good idea. Probate is expensive and time-consuming. Assets can pass to your heirs without going through probate if you properly establish and fund a trust as part of your estate plan. A skilled estate planning attorney can help you determine if there are additional steps to consider for your estate plan based on your specific circumstances.