Estate planning has many benefits for individuals and families. Many people think they don't need an estate plan until they are much older and have accumulated a significant amount of wealth. This is not true. Younger adults also benefit from having an estate plan.
Regardless of how much money you have, it is important to have an estate plan. This is especially true for people who own property or have children. Estate plans do not need to be complex, and many younger individuals benefit from creating a basic estate plan when first starting out.
What should an estate plan include? An estate plan should include a will, living will and a durable power of attorney in most cases. There are other legal documents that can also be included in an estate plan but these are the three main documents to include in an estate plan that will help you and your loved ones in the event you pass away or are incapacitated.
Below is a list of the three documents to include in an estate plan, and the benefits of having each legal document:
- Will: details how your assets will be transferred and can appoint guardians for any children. Wills can be as detailed as an individual would like.
- Living will: documents how you should be taken care of if you are incapacitated and unable to make decisions on your own. Living wills should also have a separate power of attorney to appoint who will make these decisions.
- Durable power of attorney: a trustee is appointed to manage the distribution of your assets. Other duties include accessing your bank accounts and selling your home so it is important to pick someone who is trustworthy.
There are other documents to consider including in an estate plan. Individuals may want to consult an estate planning attorney to review their estate plan and make sure everything is accurate. It is also important for individuals to remember to review their estate plan every few years and make revisions as necessary.
Source: US News, "Estate Planning Tips for People Under 40," Sienna Kossman, Sept. 19, 2013