You don’t need to be wealthy to have an estate plan, but what you should have is fiscal fitness within an estate plan. What do you need in a fiscally fit estate plan?
A Will
A will is necessary even if you are using a trust in an estate plan, since the will is used to name an executor for an estate as well as a guardian for minor children. A pourover will is used together with a trust to transfer any property that may not be held within the trust after you pass away. If the will is the primary estate planning document, it should also document how you would like your property distributed.
Life Insurance
Life insurance can play an important role in estate planning. It can be used to not only leave money to the family to replace your income, but for other purposes, such as taking care of funeral expenses, estate probate expenses or estate taxes.
Retirement Account
A retirement account can not only help fund your retirement, but upon your passing the balance passes to a named beneficiary, such as a spouse, and can help take care of them later in life.
A Durable Power of Attorney
Incapacitation planning is an important aspect of estate planning. Plans should be made to handle your personal and financial affairs in the event you are no longer able to do so on your own. A durable power of attorney that names a proxy or attorney-in-fact can help avoid the intrusiveness and expense of guardianship proceedings.
Advance Medical Directives
Advance medical directives allow you to document your wishes concerning end-of-life treatments and the use of life sustaining measures. Besides lightening the burden of these decisions on family, they help avoid the expense of litigation should there be a disagreement concerning your care while you are incapacitated.
The fiscal fitness of your estate plan depends on your personal and family situation. An estate planning attorney can advise you on the tools that can meet your family’s estate planning needs and goals.
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- Dangers of Do-It-Yourself Estate Planning - August 1, 2021
