Planning for the future is more important than many people realize. Ensuring that you protect your loved ones and preserve your assets means creating a comprehensive estate plan.
There are several components to a complete estate plan.
Your will
Your will serves as the cornerstone of your estate plan. It outlines how you want your assets distributed upon your death. You can use your will to define your bequests, identify your beneficiaries and appoint your executor. Remember that a will needs routine reviews and updates to reflect changes in your life, including marriage, births and financial circumstances.
Living will (advance directive)
Life is unpredictable and a living will, or advance directive, accounts for that. This document outlines your preferences for medical treatment when you cannot communicate those wishes yourself. You can also include a healthcare proxy to make decisions on your behalf.
Power of attorney
Financial power of attorney provides authority to a trusted individual for your financial affairs if you become incapacitated. It allows the appointed person to manage your investments, pay your bills and make financial decisions on your behalf.
Revocable living trust
A revocable living trust provides flexibility and privacy in your estate planning journey. The trust holds and manages your assets during your lifetime, ensuring the seamless transfer of those assets to beneficiaries upon your passing.
Guardianship for minor children
When you have minor children, your estate plan should include the appointment of a guardian to care for them in the event of your death. This ensures that your children go into the care of a trusted loved one instead of family services.
Digital asset planning
According to a 2021 survey, more than 90% of investors look for information about digital currencies and other digital assets. Your estate plan should account for those assets, including allowances for terms and conditions, legacy contacts and cloud services.
Comprehensive estate planning is the best way to ensure that your loved ones get the assets you intend for them without the upheaval of having to make those decisions themselves.