Your estate plan is important because it provides instructions and information for when you pass away. There are also some estate plan components that loved ones may need before your death. Things like the power of attorney designations and the advanced directives are useful in your final days.
The powers of attorney give someone else the power to make decisions on your behalf if you’re considered incapacitated. You can name a person over your finances and someone over your health care. The person you choose is important because they have to be able to make decisions that you’d want. They also need to be capable of thinking logically even under the stress that will likely occur if you’re incapacitated.
The advanced directives document outlines your wishes for medical care for your doctors. It lets them know what treatments you want to avoid and which ones you’ll embrace. If you don’t want to be resuscitated, you need to fill out a special form, known as a Do Not Resuscitate Order.
You also need to draft a will and set up trusts. The will moves assets to your heirs, but you should only include items that aren’t in trusts and that don’t have a payable on death clause. Some financial accounts, including checking and investment accounts, require you to name a person who receives that asset when you pass away.
Trusts that you establish can pass assets along to heirs without having to go through the courts. This is easier for many people, and it provides added privacy since there isn’t a public record of it.
If you have children who are still minors, you should also set out guardianship for them. This sets the plan for who will raise them if something happens to you.
Together, all these facets of the estate plan can make things easier for your loved ones when you pass away or can’t relay your wishes to them. Ensuring everything is set up properly should give you peace of mind.
