How to Approach Estate Planning: Start With the Basics
April 23, 2014
The process of putting together an estate plan can be overwhelming and confusing. It can be difficult for people to even take the first step of deciding that they need to put a plan in place; and people can quickly get discouraged and frustrated by all the information there is out there and decide to abandon the whole thing.
However, it can be crucial to stick with the process. An estate plan is not just a piece of paper that determines who gets what if someone passes away; it can be the difference between feeling secure about the future and leaving it all up to chance. With a little time and legal support, a person can make sure he or she is prepared with an effective and comprehensive estate plan.
Instead of seeing the estate planning process as one massive and confusing undertaking, people may want to take a more simplistic approach. According to an article in Forbes, there are four basic documents that people should focus on having in any estate plan.
- A will
- A power of attorney
- A health care proxy, or medical power of attorney
- An advance health care directive, or living will
These four documents address some of the most crucial decisions that need to be made if someone has passed away or is unable to make legal, financial or medical decisions for him or herself. People who get very ill or pass away without these documents could be leaving important and highly personal decisions up to complete strangers. However, with these documents in place, people can take control of their medical care, financial goals and asset protection even when they cannot speak for themselves.
Once these documents are in place, it may be appropriate to then explore other estate planning tools that can be helpful, including property agreements and trusts. However, these are documents that may not benefit everyone and may be unnecessary. Those who do not need or want a complex estate plan can certainly decide against anything that makes a plan overly elaborate.
Putting together an estate plan does not have to be an intimidating or upsetting process. Focusing on the basics, understanding the benefits and working with an attorney who is experienced in estate planning can make it much easier to plan for the future.
Source: The Wall Street Journal, “Four Estate-Planning Documents Everyone Should Have,” Tom Lauricella, April 20, 2014