An established plan can bring you peace when you think about your assets and wishes. Estate planning involves making arrangements for what happens to your belongings after you die.
While it might seem overwhelming to think about at first, there are three important components that you should consider including in your estate plans.
1. Power of attorney
A power of attorney is a legal document that grants someone else the authority to make financial or legal decisions on your behalf. There are different types of powers of attorney, including general, limited and durable.
A general power of attorney grants broad authority to act on your behalf, while a limited power of attorney restricts decision-making to specific matters. A durable power of attorney goes into effect if you become incapacitated or cannot communicate. By learning more and appointing a trustworthy agent through a power of attorney, you can ensure that people follow your wishes about financial affairs.
2. Advance healthcare directive
An advance healthcare directive, also known as a living will, outlines your preferences for medical treatment in case you become unable to communicate your wishes due to illness or injury. This document allows you to appoint a trusted individual to make healthcare decisions on your behalf.
It specifies the type of medical care you do or do not want to receive. By creating an advance healthcare directive, you can ensure that people follow your medical requests.
3. Last will and testament
Your last will and testament, often referred to simply as a will, is a central document in any estate plan. It allows you to specify how you want people to distribute your property and assets after your death. In your will, you can name an executor and beneficiaries to inherit your belongings. Without a will, state laws will determine where your assets go, which may not align with your preferences.
Estate planning is a big part of preparing for your future. Staying aware of your options can help you create a plan tailored to your specific needs and circumstances.