Whether you have acquired many assets over time or fewer assets because you are younger, it is still important for you to have an estate plan so that your legacy is protected and so your loved ones are taken care of after you are no longer here. You may be healthy but none of us really knows what will happen from one day to the next, which is why it is so sensible to plan ahead and make sure that everything is in order.
If your estate plan is in order, you won’t have to worry about your loved ones having to scramble and meet obstacles that get in the way if you pass away. Being properly prepared and making sure that you have all of the proper documents in one place will give you a feeling of peace and comfort. It will make you confident that your wishes will be carried out after you are gone and that your assets will not end up in the wrong hands.
How do I get my affairs in order?
There are several steps that you should follow to make sure that your affairs are in order. If you follow the steps in the proper order, the result will be that your estate plan will be everything that it should be so that you can have peace of mind knowing that your estate will be protected.
- Make provisions for your estate and finances: The particular types of documents for this may vary, depending on what you have and what your situation is. The documents that you choose will determine exactly how your estate and your finances will be handled going forward. Your estate plan may include a will, trust, durable power of attorney for finances and a living trust. Those documents are for the purpose of the following:
- Will: Your will outlines exactly how your money, property and other assets will be distributed and taken care of after you die. If you have minor children, dependents who are adults, pets and gifts and end-of-life arrangements (funeral, memorial service, burial or cremation), the will usually addresses these as well. If you don’t have a will, your estate will be delegated according to state laws, which is not necessarily according to your wishes.
- Durable power of attorney for finances: This document designates a person (or people) to make financial decisions on your behalf if you should become incapacitated.
- Living trust: A living trust names and instructs a person (usually referred to as the trustee) to hold and distribute property and money on your behalf if you are incapacitated and no longer able to do it yourself.
- Planning for your health care in the future: You may have an advance directive, which gives instructions for medical treatment if you become incapacitated and can no longer make decisions about your health care on your own. Two common types of advance directives are a living will and a durable power of attorney for health care.
- Living will: This document tells doctors exactly how you wish to be treated in an emergency.
- Durable power of attorney for health care: This identifies your health care proxy, who will be allowed to make decisions for you if you are not able to communicate those decisions on your own.
Is there anything else that I need to do to complete my estate plan?
There are some other things that you should do to make things go smoothly once you have passed. Make sure that you keep all of your important papers in one place. Also, inform someone you trust about where to find your important papers in case there is an emergency. Discuss your plans with loved ones before it is too late. Allow your doctor or lawyer to speak with your caregiver when necessary. Go over your plans regularly to ensure that nothing needs to be revised.