The most common form of estate planning is a will. However, a complete estate plan includes several other essential documents that work together to protect you and your family.
Most people know they need a will, but stop there. The truth is, a basic estate plan consists of key legal documents that cover two distinct situations: what happens after you die, and what happens if you become incapacitated during your lifetime.
Basic Estate Planning Documents
The following basic estate planning documents work alongside your will to make sure every situation is accounted for.
Durable Power of Attorney
A Durable Power of Attorney designates someone to manage your financial and legal affairs if you become unable to do so yourself. Without it, your family may need to go through a costly, time-consuming court process to take care of your basic financial needs.
Healthcare Power of Attorney
A Healthcare Power of Attorney names someone to make medical decisions on your behalf if you’re unable to communicate your wishes. This person works with your medical team to make treatment decisions based on your values and preferences.
Advance Healthcare Directive
An Advance Healthcare Directive is your written statement of wishes regarding end-of-life medical care. It addresses questions about life-sustaining treatment, resuscitation, and comfort care.
Beneficiary Designations
Beneficiary designations on your retirement accounts, life insurance policies, and bank accounts override whatever your will says. Keeping them current is one of the most overlooked aspects of basic estate planning.
What Is the Most Common Form of Estate Planning for High-net-worth Individuals?
For high-net-worth individuals, a Revocable Living Trust is typically the centerpiece of the estate plan. Unlike a will, a living trust allows assets to pass directly to beneficiaries without going through probate. It also provides continuity if you become incapacitated.
That said, a revocable living trust doesn’t replace the other basic estate planning documents. A pour-over will, durable power of attorney, and healthcare directives are all still essential pieces of a complete, well-rounded plan.
How to Set Up Your Basic Estate Planning Documents
Getting your estate plan in place is simpler with Nicole Pavlik Law Firm. Here are your next steps:
1. Take stock of what you have.
Make a basic inventory of your assets, including real estate, bank and investment accounts, retirement accounts, life insurance policies, and any significant personal property. Knowing what you own helps your attorney understand what needs to be covered and how.
2. Think about who you trust.
You’ll need to name people for key roles: a personal representative to carry out your will, an agent to manage your finances, a healthcare proxy to make medical decisions, and a guardian for any minor children. These don’t all have to be the same person.
3. Work with an estate planning attorney.
DIY options exist, but an attorney ensures your documents are legally valid, properly drafted, and properly coordinated with one another. A mistake in a will or power of attorney can create problems that cost far more to fix than it would to get it right the first time.
4. Sign and store your documents properly.
Basic estate planning documents must be executed in accordance with specific legal requirements to be valid. Keep originals somewhere safe and make sure the right people know where to find them.
5. Review your plan regularly.
Revisit your documents after any major life event, such as marriage, divorce, a new child, a significant change in assets, or the death of someone named in your plan.
Put Your Estate Plan in Place Today
The best time to get your estate plan in order is now. At Nicole Pavlik Law Firm, we make the process straightforward, personalized, and stress-free. Contact us today to schedule your consultation.