Financial professionals and those who are involved in the legal aspects of estate planning advise people to be aware of the importance of these fundamental documents. A will is the most basic type of estate plan and even those who are younger or believe they have time to create one should not let it recede into the background. This becomes especially urgent when there are health challenges impacting a wide swath of people in California and across the nation. In addition to a will, other documents come to the forefront in these circumstances.
The critical parts of a comprehensive estate plan
As stated, a will covers the person – the testator – and lists how he or she wants the assets to be divided after death. This includes bank accounts, real estate, automobiles, collectibles and items of sentimental value. Dying without a will is known as dying intestate and leaves the decision to the courts as to how property will be allocated. Most people prefer to make the decisions on their own and want to avoid this. Children are especially worrisome as the preferred guardian may not be who would be given custody of a child if the court decides. Certain assets require more hands-on involvement. A retirement plan has a beneficiary listed and a will cannot impact that. This is also true for life insurance.
Other vital documents to be cognizant of
Although a will is important, there are other decisions and documents that people should be aware of to have for full protection and so their wishes will be adhered to. Naming an executor is key. This is a trusted person who will make sure the testator’s wishes are carried out after death. Many people want to have an advance health-care directive (a living will) to detail how their wishes are carried out if there is incapacitation. For example, some people do not want to be kept alive through artificial means like a respirator. A living will can avoid that. A power of attorney can be useful to let another person oversee their affairs.
Professional advice is useful for estate planning
Even a simple estate plan should be assessed by a legal professional who can spot potential problems and address them. If there are more complicated issues such as a person who has significant wealth, owns a business, has gotten divorced and has children from separate marriages, these can be handled with estate planning. A consultation can provide information and guidance in how to proceed.