5 Vital Aspects of Creating a Good Estate Plan

Many people believe that having a will is the only document they need for their estate plans, but this is not true. A will serves an essential role in estate planning, but it is not the only document that most people need. A lawyer specializing in estates and trusts can help you determine the tools you need for your plan, and here are some of the top aspects the lawyer might discuss with you.

1. Last Will and Testament

A will is the shortened term for last will and testament, and it is a crucial document for your estate plan. It is the most fundamental tool you can use, and if you use nothing else in your plan, you should at least have a will. A will lets you describe your primary wishes after you die, and you can update this document as often as needed. Your will can contain the names of your beneficiaries and your desires for burial or cremation. A will can also provide many other instructions, and your lawyer can explain these things if you have questions.

2. A Trust

Having a trust is another vital aspect of a good estate plan. A trust is a separate entity from your will. A trust is where you place your assets for protection. When you have a trust, your beneficiaries will face fewer challenges receiving the assets you left them when you die. Your family will not have to go through probate court if you have a trust, which is a significant benefit.

3. Power of Attorney

Another crucial estate planning tool is power of attorney (POA). You can create two different types of POAs, and both are essential. The first type is for financial purposes. A financial POA is a person that has the power to control your finances if you are alive but unable to manage your finances and make financial decisions. The other type is a healthcare POA. A healthcare POA gives someone the power to make medical decisions if you cannot make them yourself.

4. Guardianship Rights

If you have young children, it is crucial to use an estate planning tool to create guardianship rights. Guardianship rights allow you to name who takes care of your children if you die. You can choose a friend or relative to be your kids' guardian, and the court cannot object to your wishes. If you have minor children, creating guardianship documents is vital. If you do not have these papers prepared before you die, the court will choose where your kids go if you die. You will have no say in the matter, and your kids could end up in the wrong hands. You can avoid this problem by meeting with an estate planning lawyer to create these plans.

5. Life Insurance

The final critical aspect of an estate plan is life insurance. Many people do not realize that life insurance is part of estate planning, but it is. Purchasing a life insurance policy provides a way for you to financially protect your loved ones if you die. You can choose from many types, but many people prefer a term-life policy. Term-life insurance policies provide financial compensation for a specific time. It can be 10 years, 20 years, or longer, and you get to choose.

Creating an estate plan that contains each one of these tools is a good way to protect your family. To learn more about these documents or the type of legal work you need to complete, reach out to an estates and trusts lawyer. If you would like to begin working on your plan, contact a law firm that offers estate and trust legal services.