Estate planning is an effective way to ensure that your loved ones are taken care of after you die. Failing to have a solid estate plan in place can lead to your loved ones having to go through a lengthy and expensive probate process. If you decide to create an estate plan, here are the essential components that you need to include.
A comprehensive will
A will is a legal document that outlines your wishes for how your property and possessions will get distributed after you die. You can also use a will to appoint a guardian for minor children and pets. If you don’t have a will, the state in which you live will determine how your assets are distributed after you die. This may not be in accordance with your wishes.
A trust
A trust is a legal document that allows you to appoint someone else to manage your property and assets while you’re alive. This can be helpful if you want to avoid probate or if you have minor children who will need someone to manage their inheritance. A trust is also a good way to protect your assets from creditors.
A power of attorney
A power of attorney is a legal estate planning document that allows you to appoint someone else to make decisions for you if you’re unable to do so yourself. This can be helpful if you become incapacitated and need someone else to, for instance, manage your finances or make medical decisions on your behalf.
It’s important to note that estate planning is not just for wealthy people. Everyone should have an estate plan in place, regardless of their income or net worth. If you’re thinking about creating an estate plan, make sure you don’t miss these essential components.