No two estate plans are the same, however, it is important that estate planners are familiar with the different components of an estate plan so they put together the best estate plan for them. There are several different types of estate planning documents that can be included as part of an estate plan.
Estate planning documents
Estate planning documents can help estate planners plan for their own care and also ensure that their family members will be cared for and their assets and property will distributed according to their wishes outlined in their estate plan. Estate planning documents include:
- Will – wills are commonly known estate planning documents that distribute the estate planner’s assets and property to their beneficiaries as set forth by the estate planner in their will.
- Trust – a trust allows the estate planner to transfer property into the trust that will be managed for the benefit of the beneficiary. Trusts can be effective for transferring property in a manner that minimizes tax consequences and probate.
- Durable power of attorney – having durable powers of attorney for healthcare and financial affairs can designate a trusted individual to manage the estate planner’s medical and financial affairs if they become incapacitated mentally or physically, either temporarily or permanently, and cannot care for themselves.
- Advance medical directive – an advance medical directive outlines the medical care and treatment the estate planner wishes to receive, or wishes to decline, in case they are not able to express those wishes for themselves due to disability or if they become incapacitated.
It is important that estate planners consider all of the different components of the estate planning process when they are deciding what to include in their estate plan. Familiarity with the different estate planning tools, and what they do, can help them do that.