Making an estate plan can be a confusing process and it can be hard to know what you should include and what you should not. This post aims to give three basic documents that everyone should have in their estate plan, no matter what their age or financial status.
1. Will or trust
It may surprise you to learn that six out of ten Americans do not have a will. Creating a will, or a living trust, is a crucial element of your estate plan. It may be wise to draw up a will or trust before you do anything else. This type of document can help you decide where you want your assets, including both money and physical items, to go after you are gone as well as who will care for your children if they are still under 18.
After you have drawn up a will or trust, or while you are drawing it up, it is important to think about and name who your assets will pass on to. Children? Other family members? Friends? Charity? Naming beneficiaries will make sure that you know where your assets are going, otherwise a judge may decide for you.
3. Durable power of attorney
A power of attorney is a document that allows an individual to do legal things on your behalf. You may want a durable power of attorney for certain things in your life, as they are allowed to act on your behalf if you are unable to make decisions. For example, if an injury incapacitates you. Naming an individual as your durable power of attorney can make you feel more at ease, as they can carry out your end-of-life wishes when you are unable to do so.
It may never feel like the “right” time to set up your estate plan, which is why it is important to get it done sooner rather than later.