A will, a permanent power of attorney, advance medical directives, and a trust are four essential documents designed to ensure that your wishes are met and that your loved ones can seamlessly navigate the process. Many people believe that having an estate plan simply means writing a will or trust. However, there is much more to include in your estate planning to ensure that all of your assets are seamlessly transferred to your heirs after your death. There are specific estate planning documents, such as power of attorney and will or health care trust.
It is essential to draft a permanent power of attorney (POA) for an agent or person you assign to act on your behalf when you cannot do it yourself. In the absence of a power of attorney, you can let a court decide what happens to your assets if you are found to be mentally incompetent, and the court's decision may not be what you wanted. As noted above, several of your possessions may pass to your heirs without being dictated in the will (for example, so it is important to keep a beneficiary and a contingent payee in such an account). Insurance plans must include a beneficiary and a contingent beneficiary, because they can also pass outside of a will.
Designated beneficiaries must be over 21 years of age and mentally competent. If they are not, a court may end up getting involved in the matter. A letter of intent is simply a document left to your executor or beneficiary. The purpose is to define what you want to do with a particular asset after its death or disability.
Some letters of intent also provide details of the funeral or other special requests. A health care power of attorney (HCPA) designates another person (usually a spouse or family member) to make important health care decisions on your behalf in the event of disability. An estate plan is a collection of documents and includes a will, guardianship designations, health care power of attorney, beneficiary designations, durable power of attorney, and a personal letter of intent describing your wishes, should you die or become incapacitated. A comprehensive estate plan includes four estate planning documents.
These documents include a will, financial power of attorney, advance care directive, and living trust. Retirement plans, such as 401 (k) workplace plans and individual retirement accounts When it comes to estate planning, having a last will and will is probably the first thing that comes to mind. Most people think this is just a will. It may sound a little macabre to think about your death, but if you approach it as a financial plan and nothing else, it can help make the whole process feel a little less uncomfortable.