The estate planning process can seem daunting at first. There is a lot to consider, and all of the decisions that need to be made are very important ones. Here, our estate planning attorneys lay out the 5 main components of estate planning:
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1. Wills and Trusts
A common misconception is that only wealthy people need wills or trusts. In fact, a will or a trust is a crucial part of any estate plan, whether you are wealthy or of modest means. A will or a trust will direct the distribution of your estate (all of your property and assets) after your death, according to your wishes. A will can also name a guardian for any child you have who is not at least age 18 at the time of your death.
2. Durable Power of Attorney
Each of us has a complicated web of financial and legal responsibilities to take care of from day to day. We pay bills, manage bank accounts, sign documents, and perform any number of other ordinary, yet important, tasks. Should we become unable to perform these tasks due to illness, injury, or death, chaos can ensue. Bills won’t get paid, deposits won’t go into our accounts, and responsibilities won’t be met. A durable power of attorney, however, allows you to name a trusted individual to handle your financial and legal affairs should you be unable to manage them yourself, whether temporarily or permanently.
3. Medical or Healthcare Power of Attorney
Like the durable power of attorney, a medical power of attorney, sometimes called a healthcare power of attorney, allows you to authorize a trusted individual to make decisions about your medical care if you are unable to make those decisions for yourself. Having a living will or advance healthcare directive does not preclude the need for a medical power of attorney, as situations may arise that are not addressed in the living will, and those will require decisions to be made by the person you have designated.
4. Living Wills and Advance Directives for Medical Decisions
Living wills and advance healthcare directives are legal documents that specify your preferences for medical care if you are unable to make decisions for yourself and are terminally ill, seriously injured, in a coma, late-stage dementia, or near death. The living will or advance healthcare directive can ensure that you get the medical care you want and are not given treatments that you don’t want. It can also relieve your family members of decision-making in a time of crisis and minimize confusion or disagreement about what you would choose if you were able.
5. Beneficiary Designations
While you are creating your estate plan, you should also ensure that you have named beneficiaries and that your beneficiary designations are up to date. Beneficiaries will need to be named for benefits that are paid directly without going through the estate, such as benefits from life insurance policies and retirement plans.
These 5 components will give you a good start on a comprehensive estate plan. Contact Craig Associates, PC at 828-944-4798 or contact us online to speak with an experienced estate planning attorney and learn more today.