Although it may be difficult to think about, having an estate plan in place ensures that you and your assets are cared for by someone you trust when you are no longer able to do so yourself. No matter your health or your age, it’s never too early to begin arranging your end-of-life plan and to share your wishes with those you trust.
The first step in planning your estate is speaking to a lawyer who is knowledgeable on state laws and required documents, and can answer any questions you may have.
A typical estate plan includes instructions for how your health care, assets, and funeral should be handled as well as who has the authority to make these different decisions. Several different legal documents should be in place to make up a comprehensive estate plan.
The most important documents for every estate plan include:
- Power of attorney for health care: This document designates another individual to make health care decisions on your behalf should you become unable to do so. A backup individual can also be selected.
- Living will: Also known as an advanced health care directive, this document specifies your wishes for end-of-life care or in the case of a catastrophic illness. Discussing these wishes with your designated health care power of attorney can help make a difficult time easier.
- Durable power of attorney: This enables you to choose who will handle your finances as well as how you would like them to be handled. Without a power of attorney, a court may be left to determine the distribution of your assets.
- Authorization for final disposition: While “next of kin” is legally authorized to make funeral and burial arrangements, this document lets you specify a different individual if desired and also detail how you wish your funeral and burial to be handled.
- Trusts and wills: These documents instruct what should be done with your assets (money, possessions, real estate, etc.) upon death, and who will be in charge of carrying out your wishes.
- Inventory of assets: This document contains all of the vital information necessary for someone to manage your estate, including bank information, credit card numbers, attorney contacts, pensions, insurance, and more.
Once these documents are in place, it’s important to review them regularly and make sure they are in line with your current needs and wishes. Discuss the plan with those involved and be sure to store the documents in a safe, accessible place.