The people you leave behind must deal with your estate when you pass away.
A will is a good start, but every estate plan should include a few essential documents to plan ahead.
1. A Will
A will is a document that details who will inherit everything in your estate. You dictate who will receive your money, your home and other property so that there is no question about the distribution. You should appoint an executor in this document who will take responsibility for settling your estate according to your wishes.
2. A Living Will
A living will is also known as a health care directive. This document explains your preferences for end-of-life care, such as under what circumstances you would want life-sustaining treatment administered or withheld. You should name a health care representative, also known as medical power of attorney, along with this document to give someone the power to make medical decisions for you if you become incapacitated through illness or injury.
3. Power of Attorney
A document that names someone as your power of attorney gives them the right to make financial decisions on your behalf. Similar to a health care representative, this power comes into effect when you become incapacitated due to illness or injury. This document can specify which type of decisions the appointed person has the right to make, such as those dealing with real estate, retirement, business or banking.
Depending on the size of your estate, consider setting up a trust in addition to these estate planning documents. Trusts can help to avoid probate and offer tax benefits.