Do you know what an estate plan is? Have you ever made an estate plan? If not, then you, at the very least, should understand that an estate plan is legal documentation of your last wishes. But, what are your last wishes?
An estate plan is full of questions like the above. It can be troubling to understand what you should include in your estate plan, yet, not impossible. There are a few key ingredients in this legal document that you should include, such as:
Itemization and heirs
First, your estate plan is the itemization of your assets. This way you have some idea where of your assets will go and who will benefit from your estate. Maybe you want your home to go to your spouse, but you want your car to go to your child – you have the final say.
The executor of the estate
Your heirs don’t instantly inherit from your estate the second you pass away. Your heirs will have to go through a probate period, which is essentially a waiting period until your estate plan is settled where decisions can be made about assets and debts. During probate, someone needs to look after your estate and that’s where an executor of the estate steps in. An executor handles the care and upkeep of your estate and ensures any other legal documents, debts and taxes are settled before distribution.
Powers of attorney
Most of what an estate plan focuses on is what happens to your assets after you pass away, everything except for one crucial aspect: your power of attorney. A power of attorney is a representative who acts on your behalf if you’re incapacitated. They’ll focus on any financial and medical decision if you’ve developed a debilitating injury or medical condition.
Last but not least, an estate plan isn’t a do-it-yourself project. Many people struggle to put together this legal document because of all of its legal twists and turns. People often have to seek out legal help to ensure their making a valid estate plan.