Tuesday, February 28, 2012
The first step you should take when preparing to make an estate plan is to create a net worth statement that sets out all of your assets and life insurance investments. You can present this to an attorney or a financial planner when they begin to design a plan suited to your needs. Simply put, there are five documents you should be aware of when making your estate plan so that you know whether or not it is best for you to include them in your plan.
1. Will: This document can be customized to provide detailed instructions on how you want your assets distributed to your family and other beneficiaries upon your death.
2. Durable Power of Attorney: This document allows you to name another person to act on your behalf.
3. Health Care Power of Attorney: This document authorizes someone to make medical decisions for you in the event you become incapacitated.
4. Living Will: This will gives instructions regarding the use of life-sustaining measures if you come down with a terminal illness. It expresses your desires, but does not give anyone else the authority to speak in your place.
5. Revocable Living Trust: You can transfer assets into a revocable trust so that while you're still living, you can manage your financial affairs. This way, the trust assets escape probate and keeps your personal information private.
See Sean Randall, Your Five Most Important Estate Planning Documents...Are You Prepared?, The Georgetown Dish, Feb. 26, 2012.