Having an estate plan in place gives you control over your future while ensuring that your legacy is safeguarded. No matter what you own or your status in society, having a properly created estate plan gives you peace of mind knowing that your wishes concerning your assets will be honored when you are no longer around to make important decisions.
But, the most effective estate plan goes beyond having just a will. A good estate plan comes with several components. Here are some of them:
A will
This is, perhaps, the most prominent estate planning tool. This legally-binding document outlines how your property will be distributed upon passing on. If you die without a will, the state of New Jersey will determine how your property is distributed. A will is especially crucial when you have small children since it allows you to name a guardian for them. However, it is important to understand that a will only covers probate property.
A living trust
Like a will, this document passes down assets to beneficiaries upon your death. However, in a trust arrangement, you can appoint an individual or an institution as the “trustee” to hold the property on behalf of the designated beneficiary. There are several reasons why you should consider setting up a trust. The most popular one is to avoid probate. This saves both time and money.
A medical power of attorney
Also known as advanced healthcare directive, this estate planning tool allows you to designate someone to make medical decisions on your behalf. You can also use a medical power of attorney to articulate your wishes in the event that you become incapacitated or are facing a life-threatening condition that requires specific care. For instance, you can indicate if you wish to be taken off life support equipment.
An estate plan is your mouthpiece when you are either too ill or no longer around to make crucial decisions. These are some of the most important tools you should consider including in your estate plan.