Contrary to popular belief, your estate planning is not complete once your will is written and signed. There are other equally important elements of a solid estate plan that should be addressed. Below is a quick run through of the five elements every estate plan should have.
- Will– Your will is a legally-binding document that names who will receive your personal property at the time of your death. It also appoints the legal representative that will be responsible for carrying out your wishes. If you have minor children, it will also name the guardian for the children.
- Trust– A trust is a legal arrangement through which one person holds legal title to property for another person. Your attorney can discuss the tax benefits with you in detail and determine if a trust is appropriate for your situation.
- Power of Attorney– A power of attorney names a person to make decisions for you in the event that you become incapacitated. The person is legally permitted to step in and take control of your finances, and naming someone power of attorney insures that the person you want in control is able to be in control.
- Medical Directives– Medical directives typically include: a health care proxy, a durable power of attorney for health, a living will and other important medical instructions.
- Beneficiary Designations– When you establish your estate plan, remember to name a retirement plan beneficiary. Failing to do so could have tax consequences.
