If you already have a last will and testament in place, that is a good start. But unless you have very little in assets, a solid estate plan should involve much more. There are plenty of other documents and tools that can help you describe your wishes, distribute your assets and protect your interests.
This may sound intimidating, but it really is not as complex as it may seem. Here are some other estate planning methods to consider after creating a will.
If you wish to avoid probate and reduce estate taxes, you may be able to accomplish those goals with a trust. There are many different kinds of trusts, one of the most popular ones being a living trust. A living trust is a legal arrangement that allows you to manage your estate before you die and transfer assets outside probate. You can also set specific terms on wealth or property coming from a trust that you cannot do with a will.
Some assets pass outside of probate by nature. Certain retirement plans and bank accounts may be payable or transferrable on death. These documents trump whatever is in your will, so make sure you fill out beneficiary designations and update them as necessary.
Health care directive
What medical care do you prefer if you become unable to vocalize those choices for yourself? A comprehensive estate plan takes your medical wishes into consideration. You can explain your desires about end-of-life treatments through a health care directive. Some people call this document a living will. A health care directive gives you and your family peace of mind and instructs medical professionals on matters like resuscitation and life support.
Power of attorney
A power of attorney is a way to determine who will manage your financial and legal decisions in certain circumstances. You may wish to appoint someone to handle these matters in the event you require long-term care or become disabled.