Death is a subject most people prefer to avoid thinking or talking about. Despite the discomfort, planning for what will happen to your estate after you pass is a concern every adult should address.
There are many documents that may go into your estate plan depending on your life, wealth and family. An estate plan has many benefits for you and those you leave behind.
Plan for your future care
When most people think of estate planning, they do not think beyond a will. A good estate plan also considers the possibility that you may become incapacitated and unable to make decisions for yourself. You should establish a health care proxy to make medical decisions for you and a power of attorney to make financial decisions for you. These designations require separate documents but the same person may hold both roles if you trust them to carry out the responsibilities.
Provide for your family
In addition to financially providing for your family after your passing, an estate plan will cover who will care for your children if you and your spouse should both pass. You may appoint guardians to care for your children and to look after your finances until your children reach an age you specify.
Declare where your assets will go
A will or living trust can outline exactly where you want your assets and property to go upon your death. This minimizes the need for involvement from the court in decisions about the distribution.
Protect your business
If you own a business, you may use an estate plan to name your successor and determine what happens to your interest in the business after you are gone.
If your estate plan may leave people out of an inheritance they expect, or otherwise be surprising to your heirs, you should discuss it with them before your passing to help avoid confusion, family discord or challenges in probate court. If you choose not to forewarn people of your plans, including a letter of instruction explaining your choices can help to answer any questions you leave behind.
