You don't want to think about the end of your life and what will happen to your assets after you have passed away, but by doing so, you can prevent your family and loved ones from having to deal with the stress that comes when losing someone who did not have an estate plan in place. An estate plan can help with decisions before and after your death. Here is an overview on a few important elements to an estate plan.
Several Elements to An Estate Plan
There are a few essential elements to an estate plan, including a will, health-care proxy, and power of attorney, You may also benefit from establishing a trust. Putting an estate plan together is often done with your financial adviser and an estate planning attorney.
One of the first things you should do when implementing an estate plan is to take an inventory of your assets. This should include your savings, retirement account, business interests and real estate.
From there you'll want to ask yourself who will inherit your assets, who you trust to handle your financial affairs, and who you trust to make medical decisions on your behalf when and if you become unable to make those decisions on your own. When doing your estate plan, the answers to these questions are very important.
The answer to the question of who you want to inherit your assets goes into your will. Your will outlines who will receive what. When you die without a will, called "intestate," the court ultimately makes those decisions for you. So if you have something in particular that you know only one person should receive, such as an antique ring or a special collection, you need to designate your wishes in your will.
Power of Attorney
The answer to the question of who you trust to handle your financial affairs goes in your power of attorney. This is a special document that appoints someone to be able to handle your money, stocks, investments, transfer real estate, and make all necessary financial decisions on your behalf. The person who you designate as your power of attorney has no limitations on what they can do, so you need to appoint someone you trust will make the same decisions that you would make with regards to your financial affairs.
Health Care Proxy
Lastly, your health care proxy will outline the person who you appoint to handle all medical decisions on your behalf, should you become incapacitated. This means that your life will essentially in their hands, so again, choose someone you trust.
There are a lot more elements to an estate plan, but the above gives you a starting point. When you don't have these elements in place, your family's hands are tied as to who gets certain assets, who can make decisions about your finances and who can make health care decisions on your behalf. The court will intervene to answer those questions, so take the time now to help save your family from added heartache later. For more information about estate planning, contact a professional such as Robert Stone Attorney at Law.