When you ask someone if they have written a will or if they’ve done any estate planning, the will may be all they really consider. They list everything of value that they own, write down who should get which assets and sign off on the document.
A simple will is a good place to begin, but do not make the mistake of assuming that is all there is to estate planning. The reality is that your estate plan should have numerous documents to address very different potential future outcomes. A few options are listed below.
- A medical power of attorney: This document allows you to appoint someone as your agent and health care proxy in order to make medical decisions for you if you are incapacitated.
- An advance directive: This important document – sometimes referred to as a living will — provides instructions for the doctors about the type and extent of life-saving treatment you would want at the end of your life.
- A legal power of attorney: Aside from medical decisions, you need someone to handle other matters and manage your finances if you become incapacitated.
- A trust: If you want to have more say in exactly how you leave your assets to your heirs, this document gives you that control. For instance, you can leave $50,000 specifically for college tuition, rather than just giving it to an 18-year-old heir and hoping they use it wisely.
- A guardianship designation: If you have minor children or an adult heir with special needs who requires assistance and care, you can pick a guardian to take over your role after you pass away.
These are just five examples that show how important it is to consider all of your options when doing your estate planning