When developing an estate plan, it’s important that you create the proper kinds of legal documents so that all of your concerns, be they financial or personal, are met to your satisfaction. A good estate plan consists of different key types of documents, each of which addresses a specific topic. It’s always best to create these documents as soon as possible and after consulting with a qualified estate planning attorney.
1. Living Trust: A living trust is a kind of legal entity to which you can transfer ownership of your property while still retaining the ability to use it and gain benefit from it. When you create a living trust you appoint a trustee to manage the property for you. The trust actually becomes the owner of the property, so you avoid having to transfer that property to new owners through the often complicated probate process.
2. Medical Directives: Medical directives include such documents as living wills, do not resuscitate orders and healthcare proxies or health care powers of attorney. Medical directives allow you to ensure that your health care decisions will survive any loss of capacity you might suffer. For example, if you fall into a coma you can use a living will and a healthcare proxy to ensure that your doctors and healthcare providers will give you the kind of care you desire.
3. Durable Power of Attorney: If you eventually lose capacity as a result of an illness or injury, you’ll also need someone to take care of other responsibilities you may have, such as paying your bills or looking after your property. Appointing someone to act on your behalf requires you to create a durable power of attorney. This document allow you to choose the person who will make these decisions for you, instead of having a court appoint someone to do it.
4. Last Will and Testament: Finally, no estate plan is complete without a properly drafted last will and testament. Even if all of your property is transferred to a trust before you die, a last will and testament can serve as the final safety net to ensure your wishes are followed, as wel as make provisions for who will manage your estate for you.