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The basics of creating an estate plan

| Apr 15, 2020 | Estate Planning

No matter how old you are, accidents can happen. Unexpected illnesses can set in.

That’s why everyone – from young adults to senior citizens – needs an estate plan.

Don’t know where to start? Here are the four things you need to assist your family – and to give you peace of mind – should you become incapacitated or pass away.

Advance directive

This gives your doctors a guide to your medical wishes. It lets your family members know the kinds of treatment you’d like to have, if you’d want doctors to stop treating you under certain circumstances and when you’d like pain relief instead of treatment. A durable power of attorney for health care, which typically goes hand in hand with an advance directive, names the person (and a backup person) who you would like to work with doctors on your care.

Revocable living trust

This is not just for the wealthy. A trust holds your assets – your investments, real estate and such – and it doesn’t need to go through the probate process when you die. Even though the assets belong to the trust, you can make changes to it at any time.

Durable financial power of attorney

This signed document gives the person you specify the authority to make financial decisions on your behalf if you are incapacitated. This covers financial assets not included in your trust, such as your household checking account. This can include talking with representatives of everything from the electric company to your credit card company to your bank. Some financial institutions also have in-house power of attorney forms they will require to be executed, so ask officials with your bank or brokerage accounts.

Will

Your will also addresses things that aren’t in your trust and earmarks items you’d like to leave to others, such as a family heirloom, jewelry or your car.

These are the basics of your estate plan, though your situation could warrant something different or more complex. By consulting with an estate planning attorney, you’ll learn exactly what is right for you and your family.