Perhaps the time has come for you to think about estate planning, but you hesitate, worried that this has to be a long, involved process.
Putting your affairs in order is not as complicated a task as you might think. Here are four documents you should have in a basic estate planning toolkit.
1. Your will
Your last will and testament will provide instructions for distributing your assets and belongings to beneficiaries. This document will also name your executor, the person responsible for administering your estate and making the appropriate distributions to your heirs. If you have minor children, you can also use your will to appoint a guardian for them if you should die unexpectedly.
2. A revocable living trust
Open a revocable living trust to hold assets such as property, investments and even bank accounts. The trustee you name will manage these assets. As the name implies, you can revoke or change this kind of trust at any time.
3. Power of attorney for finances
Durable powers of attorney are important legal documents. The POA for finances allows the agent you appoint to manage your financial affairs if you should become incapacitated and cannot handle them yourself. You can give your agent either general powers or limited powers.
4. Power of attorney for healthcare
A healthcare power of attorney allows you to name a responsible person as your agent. If you become incapacitated, your agent will interact with physicians and other healthcare professionals in making medical decisions on your behalf.
The proactive approach
With age comes the possibility of some form of dementia. Therefore, it is a good idea to start the process sooner rather than later. The process is not complicated, but your estate planning documents are only legal if you are mentally competent when signing.