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Everyone should have an estate plan with final directives for the disposition of personal possessions and final wishes, especially if you have significant valuables or a complex inheritance line. While you will have to consider many things when preparing your estate plan, here are four types of critical documents that should be given priority attention.
Wills and Living Wills
A Last Will and Testament is the traditional legal document that many people have. It includes bequests, exclusions, gifts, and funeral arrangements as well as managing the financial responsibilities of the deceased. Recent generations of people have also begun making a Living Will that addresses issues associated with conducting business for and managing the responsibilities of someone who may become incapacitated by injury or illness.
Trusteeships and Guardianships
These documents appoint a specific person or entity to administer a trust for someone who is incapacitated, or it can oversee the estate’s asset distribution to minor children if the person in charge should pass away or become unable to manage it. This arrangement type can be intricate, so it is best to consult an expert for up-to-date, applicable advice. A guardianship names a responsible and willing person who can provide oversight for someone who is not legally or medically able to manage their own affairs.
Power of Attorney
A power of attorney may be executed to handle routine business transactions, financial decisions, and medical considerations. The person does not need to be elderly, ill, or incapacitated. Some individuals designate someone they know and trust to stand in for them if needed, or in other cases, for example, due to frequent travel or a demanding job. The power of attorney, or POA, can be restricted to financial, business, or medical provisions, not necessarily all. Some appointees are paid for serving in this role.
An estate plan can be useful in bringing these documents together in a cohesive and organized way. Families with complex inheritance structures or someone with bequests that may leave out certain individuals could benefit from an estate plan. A legal adviser with experience in financial planning or estate planning can help people make final arrangements that will minimize taxes and reduce stress or conflict among family members.
No one likes to think of their own demise, especially when they are young and healthy. An estate plan is one of the kindest things you can do to help your family adjust when you are no longer able to carry out your regular duties.