Four Essential Components in a Basic Estate Plan
Everyone knows they should have a will, but a will alone is not a complete estate plan. The four components below constitute a basic estate plan that everyone should have in place. Based on individual needs and assets, other components may be necessary.
1. Assist your loved ones to help you in a time of need by maintaining a document that collects and organizes your emergency and essential information
This is not a legal document, but is necessary to family members, friends, or other loved ones who need to implement either your durable power of attorney, healthcare advanced directive, or your will. This document lists your accounts, account numbers, various financial assets, properties, and debts. In short, it contains all of the information needed to maintain your estate. The information listed in this document will likely change frequently so you must update the document as appropriate.
2. Designate a person to handle financial and legal issues by executing a durable power of attorney
A durable power of attorney identifies one or more individuals to make important decisions on your behalf, but only if you are incapacitated. It becomes effective when you experience a disability, incompetency or incapacity that prevents you from making decisions. This document should provide for decisions relating to property, financial, management, banking, business and other matters.
3. communicate your healthcare related wishes and designate an individual responsible for carrying out those wishes by executing a Healthcare Advanced Directive
This document insures that your healthcare related wishes are known and that a representative of your choice is responsible for implementing those wishes. It takes the place of a living will and healthcare power of attorney.
4. Distribute your assets to your loved ones as you wish and with the minimal amount of state involvement by executing a will.
Finally, a will insures your possessions end up with the loved ones of your choice. It also drastically reduces the work to be done by loved ones who are responsible for distributing your estate. Just as important, it reduces the potential for family discord that may arise when your wishes are not known.
Take the time to order your affairs by establishing and implementing a proper estate plan.
For more information about this or other legal topics, please e-mail Michael Dalrymple.