You may have heard that you need to make an “estate plan,” but what does an estate plan cover and how do to make one? Here is a simple list of the most important estate planning issues to consider.
1. Make a Will
In a will, you state who you want to inherit your property and name a guardian to care for your young children should something happen to you and the other parent.
2. Consider a Trust
If you hold your property in a living trust, your survivors won’t have to go through probate court, a time-consuming and expensive process.
3. Make Health Care Directives
Writing out your wishes for health care can protect you if you become unable to make medical decisions for yourself. Health care directives include a health care declaration (“living will”) and a power of attorney for health care, which gives someone you choose the power to make decisions if you can’t. (In some states, these documents are combined into one, called an advance health care directive.)
4. Make a Financial Power of Attorney
With a durable power of attorney for finances, you can give a trusted person authority to handle your finances and property if you become incapacitated and unable to handle your own affairs. The person you name to handle your finances is called your agent or attorney-in-fact (but doesn’t have to be an attorney).
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