Although it might seem that only people with real “estates” need estate plans, a lot of individuals actually require one. This is because an estate essentially represents your belongings on both financial and legal terms. For more information on estate planning, contact an attorney.
What is the need for estate planning?
Consider estate planning as an example to ensure that your wishes are honored in the event that you die or become incompetent in making decisions for yourself.
It is an umbrella term for a variety of different legal documents that serve to clarify your choices for health care, the allocation of your assets and belongings, and the identification of the individual who you want to look after your dependents, pets, and children.
Your possessions could end up in legal inactivity for years without an estate plan, which is why it is so essential. Your children and other surviving family members might face unnecessary challenges as a result of being responsible for your financial affairs. In addition to making sure your assets reach the people of your choice, preparation can save money, gift, and estate taxes.
What are the documents required for the process?
Although every estate plan is distinct, the list of often included estate planning paperwork is shown below.
- Last Will
You may decide in this legal document who will be looking after your children, dependents, and pets, as well as how you want your possessions divided.
- Living will
If you are terminally ill, this is used to indicate your desire for end-of-life care; it is not the same as a final testament. You may choose when and if you want to be taken out of life support, for example.
- Trust
Although there are numerous kinds of trusts, they all revolve around a relationship wherein one party, known as the trustor, grants another, known as the trustee, the authority to hold the ownership of assets or property on behalf of a third party, known as the beneficiary.
- Health care proxy, also known as Medical Power of Attorney.
It provides you the option of choosing a person to speak on your behalf when making important choices about your medical care.
- Financial POA
It allows someone to decide on financial matters and handle them on your behalf.
- Life insurance
To help your loved ones replace lost income, cover funeral costs and other end-of-life expenses in your absence, or even pay the mortgage or rent, life insurance could be added to an estate plan. Moreover, it can be utilized to leave a legacy.
How much does it cost?
The cost of estate planning will change depending on how complex your estate is. Online services like FreeWill can help you complete the required paperwork and data for free if your planning requirements are more straightforward.