A basic estate plan addresses what happens to your property and your children when you die. But estate plans can go even further. They can also plan for your incapacitation, such as if you're in an accident or become ill and can no longer take care of your own affairs. Estate plans are not a single document, but a whole collection of documents that you put together to deal with a variety of circumstances.
Estate Plans Begin With Wills
A last will and testament is the best-known part of an estate plan. A will lets you decide who gets your property when you die. You can use a will to name a guardian for your young children. You can name your executor, the person you want to handle your affairs and oversee the probate process. However, until you die, a will is not a legally binding document. Therefore, most estate plans are more extensive.
You Can Create a Trust
You can also include a trust in your estate plan. When you create a trust, you transfer ownership of your personal assets and real property to it. When you die, the trustee distributes your property according to your directions, just as an executor would do if you bequeathed assets in a will. The greatest difference between wills and trusts is that trust assets don't have to go through the probate process to transfer property to your beneficiaries. Many people include both wills and trusts in their estate plans. A "pour over" will sends to your trust any property you didn't already include.
You Can Include Powers of Attorney
Estate plans can also address what will happen if you become incapacitated. Most trusts name a successor trustee, who will manage the trust if the person who created it can no longer do so. Wills can't do this, however, because they don't have any power until you die. If you use a will as the basic part of your estate plan, you should create powers of attorney, which will allow a trusted friend or relative to manage your financial affairs for you if you are incapacitated.
You Can Include Health Care Directives
Your estate plan can also include directives regarding your life and your health. Powers of attorney can address both your financial affairs and health care decisions if you're incapacitated. You can also add a living will to your estate plan. A living will explains whether you want your life to be artificially prolonged if there's no chance for your recovery. A health care proxy or power of attorney for health care names someone to make that decision for you.
An Estate Lawyer Can Help
The law surrounding estate planning is complicated. Plus, the facts of each case are unique. This article provides a brief, general introduction to the topic. For more detailed, specific information, please contact an estate lawyer.