Many newly married couples have a narrow definition of estate planning. Though a traditional will is a part of a comprehensive estate plan, it is not the only document.
Estate plans usually include a will, which dictates the distribution of assets upon an individual’s death. Comprehensive plans can include additional documents too.
Standard documents in an estate plan
Understanding the following documents can help new families establish their estate plan and protect their family’s wellbeing. An estate plan may include any of the following:
- Will: Most people are familiar with the intent of a will. A will allows an individual to name someone to manage their estate, care for their children and leave instructions for other assets.
- Trusts: Trusts are financial accounts managed by a third party. Trusts usually reserve funds for children until they come of age to ensure financial security throughout childhood.
- Living will: Different from a traditional will, this document leaves instructions for end-of-life medical care.
- Powers of attorney: Instead of a living will, an estate plan may name a medical power of attorney who makes end-of-life decisions for them. Many families may designate a financial power of attorney as well.
- Life insurance: Life insurance policies provide families cash immediately following a policy holder’s death. These payouts can help cover short-term expenses or add to an estate.
Without a plan, the state courts will divide assets through the probate system. Grieving families may find this lengthy and often expensive process challenging, as many would rather focus on caring for loved ones. Drafting an estate plan can help one’s family recover from grief.
Every family will draft a different estate plan depending on the number of children, assets, health, and debt. Families may also change their plan at any time and for any reason.
Secure legal help
Anyone over age 18 may consider drafting an estate plan. Though these plans are sometimes intimidating, speaking with a local lawyer may help. An attorney with experience in estate plans can answer questions and provide context for how these documents help one’s family.