Ensuring that your assets go to the right people upon your death involves estate planning. Not only that, but you can use estate planning to take care of your healthcare needs, financial needs as well as the upbringing of your children should you become incapacitated.
To take care of all these factors and more, you’ll need to utilize some key estate planning tools. Here are some estate planning essentials for you to think about.
1. Your will
Your will is the starting point of your estate plan. It can serve several functions on top of ensuring that your assets are distributed appropriately. For example, you can name a guardian in your will. This means that if you have children, they can be looked after by the person of your choosing should something happen to you.
2. Trusts
While a will is crucial, it can lack some flexibility. This is where trusts come in. You can utilize trusts to distribute assets to beneficiaries but in a more specific way. For instance, you could implement a trust that distributes assets upon your child’s 21st birthday. Or, you can set up a trust to specifically pay for their education.
3. Powers of attorney
Powers of attorney (POA) allow someone else to take over key decisions should you be unable to make them. For instance, you can name a healthcare POA to make medical decisions on your behalf. Or, you can set up a financial POA to make financial decisions that are in your best interests. You can give someone full reign over these decisions or set limits according to your precise needs.
These are just some estate planning essentials. To research your options in more detail, it may benefit you to seek legal guidance.