Unlike a standard will, living wills detail what you want to happen to you if you are ever incapacitated. Medical care preferences, religious needs, and other stipulations can go into this document, and it must be followed if you cannot make decisions for yourself. This ensures that you always have control over your own life. Many people put resuscitation and life support documents in their living will.
Powers of Attorney
Another critical part of estate planning is establishing a power of attorney. This person will be able to step in and make legal decisions for you in your absence. Financial powers of attorney help make financial decisions, while durable powers of attorney have more all-encompassing privileges. It’s important to know that you have control over your power of attorney. You do not need to give them access to all areas of your life and estate.
In your estate plan, you should name an executor for your will. This person’s responsibility will be to carry out the wishes outlined in your will. They will be in charge of distributing money, objects, and property and making sure that everyone acts in your best interest.
If you do not name an executor, the state will name one for you. This can be difficult, as it often chooses individuals who are close to the deceased. However, those closest to you will need space to heal. Your best choice of executor is someone who is reliable, honest, and who cares about you but who won’t be devastated by their grief. This makes for a smoother process.
Another significant aspect of estate planning is setting up a trust. This isn’t necessarily required, but it can be beneficial in some circumstances.
Trusts involve appointing a trustee to hold and manage your assets on your behalf. This can be a good situation if a person’s mental or physical health is deteriorating, and they want to make sure that someone they trust has control over their assets.
Living trusts are especially common options. These trusts allow you to be your own trustee so that you can retain access to your assets while you’re still alive. When you pass away, the trust moves to another person who will handle your affairs. Trusts can help your assets avoid probate court and some taxes. This maximizes the amount of money that goes to your beneficiaries.