Estate planning is crucial for ensuring your wishes are carried out and your loved ones are cared for after you’re gone. More than half of Americans believe estate planning is important, but only a third have documented their plans. Nicholas Yeomans, president and advisor at Yeomans Consulting Group, emphasizes the importance of three key documents every retiree should have: a will, a durable power of attorney, and a living will.
A will is a letter to probate court that outlines your wishes and who will carry them out. A durable financial power of attorney allows a designated person to handle your financial matters if you are unable to do so. A living will, also known as a healthcare directive, specifies your wishes for medical treatment when you might be unable to communicate your decisions.
Estate planning isn’t about focusing on your demise; it’s about taking control and making decisions to ensure your loved ones are cared for. It’s a way to share your wishes and protect the people you care about most, leaving them a roadmap instead of unanswered questions. Without a will and a plan, state intestacy laws determine what happens to your hard-earned assets through a process called probate.
Three key estate documents
Probate can be lengthy, expensive, and public, causing unnecessary stress and delays for your loved ones. There are steps you can take to minimize the complexity of probate, such as titling assets properly or naming a trust to own your assets.
These steps will help limit the control state law or courts have over your assets. Estate planning also includes appointing trusted individuals to handle your finances and health care decisions if you’re ever unable to. A power of attorney allows you to select someone to make financial decisions on your behalf, while a health care proxy ensures your trusted advocate can make critical health-related choices when you cannot.
High-profile estate disputes serve as powerful cautionary tales. Thorough estate planning can save your family from unnecessary stress, empower your present by securing future care, and ensure your legacy is preserved by the people you trust most. As we embark on a new year, it’s a perfect opportunity to set new resolutions, including legal ones.
Start by organizing and reviewing your vital documents, examining your assets, and discussing your wishes with loved ones. Depending on your age and circumstances, prearranging your funeral and purchasing a burial plot can also ease the burden on your loved ones.