Proper estate planning is a tedious process, but it ensures your family’s financial future in the event of incapacitation or death and protects what matters to you!
Without proper estate planning, probate may be expensive, time consuming and possibly lead to the unjust distribution of assets. There are four important estate planning documents you will need to complete. This includes a Last Will, a Durable Power of Attorney, a Living Will, and possibly setting up a revocable trust.
There are still an array of documents needed in addition to these four important estate planning documents. However, let us first take a look at the big four estate planning documents must-haves.
Last Will and Testament
Executing a Will is most likely the first thing that comes to mind when preparing an estate plan. A will is a legal document that allows you to distribute assets after death. Without a Will, assets pass via intestacy laws and therefore may not be as you wish. Since these assets in a Will are distributed after death, a Will still goes through the court-supervised probate process.
Durable Power of Attorney
A durable power of attorney is one of the essential must-haves when estate planning as it protects you in case of incapacity. It is a document that states who your legal agent is and allows them to handle legal and financial affairs on your behalf during your life.
The agent has a legal right to act on your behalf. In case of incapacity without a power of attorney, the court will have to appoint a Guardian to take control of your person and assets.
Living Will/Designation of Healthcare Surrogate
A Living Will designates a healthcare surrogate and grants authority to make medical decisions on your behalf in case of incapacity. You may also include directives to guide your surrogate in making healthcare decisions on your behalf.
Revocable Living Trust
A revocable living trust allows you to appoint a trustee of your assets and grants you more control over the distribution of assets after death. However, as Settlor of the trust, you still have authority and control over your assets in your lifetime. The trustee will distribute assets to beneficiaries per the trust after death. Unlike a Will, a revocable living trust is private and does not go through the probate process.