Many Californians put off estate planning. After all, thinking about death and having to make tough choices is something we may not feel like we are ever ready for. However, a critical illness could strike at any age, meaning that it is prudent to draft an estate plan sooner rather than later. The following are four key documents to consider including in your estate plan but, as always, this post does not contain legal advice, so it is important to discuss your options with a professional.
The backbone of many estate plans is a will. In a will, you can dictate who you would like to inherit your assets. If you have minor children, you can name a guardian in your will who will raise your children should you and your child’s other parent die before the child is grown. You can also name an executor of your estate in your will.
Another useful document is a durable power of attorney. A medical power of attorney gives someone the authority to make healthcare decisions on your behalf, should you become incapacitated. A financial power of attorney gives someone the authority to take care of your finances should you be unable to do so on your own.
A living will is a third document you may want to include in your estate plan. A living will allows you to outline what end-of-life medical care you want. Do you want to be put on life support? Do you want CPR performed if you are in a terminal situation? Making these decisions known ahead of time can save your loved ones a lot of confusion and stress.
Finally, some people benefit from executing a trust in addition to a will. In a trust, your assets are titled in the name of the trust and are managed by a trustee. If a trust is revocable, you can change it when you are still alive. On the other hand, an irrevocable trust cannot be changed once executed. Trusts can be useful if you want to leave directions on when and how a person can inherit after you die. Also, unlike a will, trusts bypass probate.
Ultimately, an estate plan can be as simple or complex as you would like it to be. Thinking about death is not necessarily comfortable but being prepared is better than leaving everything up to chance and the state, both for you and your loved ones.