Creating an estate plan is one of the most important things you will ever do, as well as one of the most personal. Your estate plan should reflect your values, wishes and needs.
Therefore, there is no one estate plan that is ideal for everyone. Each should be unique to the person who creates it. Nevertheless, as you decide what to include in your estate plan, it may be helpful to know more about some of the most common documents.
Also known as a living will, an advanced directive allows you to provide instructions about the end-of-life care that you want to receive, as well as treatments you do not want. This becomes important if you become incapacitated and are not able to make those decisions as they arise. An advance directive is a legal document, and doctors who disregard it and provide certain types of care against your wishes can face consequences. Nevertheless, according to U.S. News and World Report, it is a good idea to discuss your wishes with loved ones in addition to putting them in an advance directive so they are aware of what you want.
Powers of attorney
A power of attorney is a document that grants someone else authority to make decisions on your behalf if you cannot do so due to incapacity. It is common to have one power of attorney to handle financial decision-making and one that pertains to medical decision-making. A medical power of attorney cannot override an advance directive, but it can handle situations for which you did not express specific wishes.
Guardianship plan for minor children
If you have minor children, it is important to make a plan for them in case you die before they come of age. Many people make out a will that specifies the person they want to take care of their children, then start a trust to cover related expenses.
A trust is an optional estate planning document, but it may be a good idea. It allows you to make sure that the money goes toward your intended purpose, e.g., the children’s care.