Every estate plan has a number of things it needs to make sure it is comprehensive in nature. A good, comprehensive estate plan will have at least six different sections.
These are six sections to include in yours. If you have these, you’ll be ready in the event of the unexpected.
1. A will and trust
A will or trust needs to be the primary component of your estate plan. Wills guarantee that your wishes are followed after your death and that your estate is distributed as desired. Trusts then help limit taxation of assets and other legal challenges.
2. Guardianship designations
Another thing you need to do is to designate guardianship over your children. If you pass away suddenly, who will take over their care?
3. Power of Attorney (health care)
If you suffer a disability and are unable to make decisions, a health care attorney can do it for you. In the event of your incapacity, this person is in control, so choose carefully.
4. Beneficiary designations
Determine who you want to receive assets from your estate. This beneficiary, or these beneficiaries, have to be named on insurance policies and other accounts. If you don’t name beneficiaries, you’ll lose your ability to choose and a judge will decide on a beneficiary following your death.
5. Letter of intent
This letter can say special requests or explain what you’d like to see done with funds or your assets.
6. Durable power of attorney
A durable power of attorney acts on your behalf when you can’t. This is great for situations where you’re unable to made decisions due to impairments, mental health problems or a physical inability.