No two estate plans should look the same. When people ask what a comprehensive estate plan should include, it depends on their needs and their family.
That said, there are some documents that everyone should have in place to plan for:
- Their incapacitation, where they can’t speak or make decisions for themselves
- Who will care for dependent loved ones if they no longer can, due to incapacitation or death
- What will happen to their assets when they pass away
A will
This is the basis of any estate plan. In many cases, people use this to designate who will inherit their assets. Some people use it to name a legal guardian for their minor children and pets. This can also be done using separate documents.
The will is crucial because if you die without one, your assets will be handed down according to state intestacy laws regardless of your actual relationship with them or your wishes.
Some people use a living trust to detail inheritances instead of a will. This can help your estate avoid probate. However, you still need a “pour-over” will to deal with any assets that aren’t in the trust when you die.
Powers of attorney
A power of attorney (POA) gives someone the authority to make decisions and transactions on your behalf. The two key POA authorities to assign are:
- POA for finances (also called a durable POA) to handle your accounts, bills, real estate and other financial obligations if you can’t because of incapacitation
- POA for health care, which gives your designated health care agent authority to speak with your medical team and make decisions about your care if you can’t
It’s best to give your health care agent some guidance by putting an advance directive for health care in place.
Advance directive for health care
This is sometimes known as a living will (not to be confused with living trust) or medical directive. You can detail things like under what circumstances you want to be kept alive through artificial measures and when you don’t. These documents can save loved ones from difficult decisions and minimize family conflicts.
This is certainly not a complete list of what you may need. However, these are the basics that everyone should have in place once they’re legally an adult. Developing the right comprehensive estate plan for you and your family requires experienced legal guidance.