If you are like most people, you may think that all your estate plan needs is a will. However, including additional estate planning documents may enable your heirs to save money on taxes and receive the assets you want them to have.
Therefore, these are a few things you should have in your estate plan.
Power of attorney
You need someone to act for you if you become mentally or physically incompetent or when you die. In fact, you should have several, one for financial matters and one for healthcare decisions. These individuals have all your rights and can act in your place. They can make financial transactions, legal decisions and medical choices for you. Therefore, choose individuals you trust completely.
Revocable or irrevocable trust
One of the best ways to reduce the estate taxes your heirs need to pay is to create a trust. When you create a revocable or irrevocable trust, you give ownership of your assets to others. Although you still have physical custody while you live, they are no longer yours. Your trust should reflect your will’s instructions.
Guardianship designations
If you have minor children, you should also designate guardians for them. Ask whether these individuals have the financial and emotional capability to take responsibility for your children. Choose guardians that will raise your children as you would, individuals who share your values.
Named beneficiaries
You should designate a beneficiary for anything not in your trust. You can do this through a letter of intent, will or beneficiary designation. These should be major assets or those your heirs may find valuable or desirable. These documents direct the courts as they distribute your assets.
Do not forget to write a living will, and contact your insurance and financial accounts to designate beneficiaries.