Everyone has different estate planning needs; however, all estate plans should have the same, basic documents.
- A Will. The crux of any estate plan, a will distributes your assets to the persons you want to receive your property when you die. In addition, a will names an executor to manage your estate, and can appoint a legal guardian and trustee for children and grandchildren.
- A durable power of attorney (POA) authorizes someone to sign your name, and act on your behalf should you become physically or mentally incompetent to handle financial matters. The person you designate in the POA can pay bills, file taxes and direct investments on your behalf.
- A Health Care Proxy authorizes someone to make medical decisions for you if you are unable to communicate them for yourself. Without a Health Care Proxy, doctors or hospitals will be required to provide medical treatments based upon their protocols, regardless of whether or not those choices are ones you would have made for yourself.
- A Living Will (or Advanced Medical Directive as they are called in some states) allows you to specify the medical treatments you want provided, or withheld, in the event you cannot communicate them for yourself. Without a Living Will, if you are terminally ill, medical care providers must prolong your life using artificial means.
- A Living Trust (also known as a revocable or inter-vivos trust) creates a separate legal entity to own property, (real estate, investments, etc.). The primary benefit of a living trust is that assets held in the trust will pass to your heirs, or be distributed gradually over time, without having to wait for your will to go through probate. This can save an enormous amount of time, money and aggravation.