A successful estate plan requires the completion of several essential documents. Individuals should keep these important papers in a safe place and update them as necessary.
Major life changes such as a marriage, divorce, children or a large inheritance often necessitate changes to an estate plan.
The Absolute Essentials
Money Talks News puts having a last will and testament at the top of its eight essential documents. This document normally accomplishes several things: decides the best interests of surviving children and pets, designates who receives remaining assets and clarifies the funeral desires of the deceased.
A revocable living trust deserves a high spot on this list as well, especially for those who have significant assets. This document names a trustee to manage a person’s property. A properly set up trust can allocate property at any time and it can result in tax savings for the estate.
A third essential piece of an estate plan concerns beneficiary designations. Individuals should keep these papers with other important documents and make changes that reflect the wishes of the primary party.
The Other Important Documents
A Forbes article highlights the importance of a durable power of attorney. This document appoints a person to make decisions in the case of incapacity. The power of attorney can manage financial assets, pay bills, file taxes and make other financial moves. A power of attorney can last for a limited time period or it can last until the death of the person granting authority.
Advanced medical directives also play a critical role in an estate plan. This document allows a person to clarify the type of medical treatment he or she receives in certain situations. A living will, a durable power of attorney for healthcare or a do-not-resuscitate order can address these medical issues.
