What do I need to include in my estate plan?

On Behalf of | Jan 14, 2025 | Estate Planning

Anyone who is reading this post is savvy enough to know that getting an estate plan is important. Knowing an estate plan is a good idea and actually getting it done are two different things. There are many things that may hold people back from putting an estate plan in place. One of the biggest hurdles is knowing what they should include in their estate plan.

Although the exact details can and should vary for each individual family, estate plans often include a mix of the following.

#1: A will and/or trust

Both wills and trusts are fundamental estate planning tools, but they serve different purposes and offer distinct advantages.  A will helps to ensure property distribution according to your wishes after death but requires probate, a public and often lengthy process.

In contrast, a trust avoids probate, allowing for quicker, private distribution of assets. A trust can also provide specific guidelines for asset use and potentially reduce estate and gift taxes.

Deciding between a will, a trust or both depends on personal circumstances, including, among other things, the size of your estate, the complexity of your wishes, the possibility of long-term care needs, reduction of taxes and privacy preferences.

#2: Essential directives and powers

In addition to a will and/or trust, a comprehensive estate plan should include a health care directive and a power of attorney. A healthcare directive specifies your wishes for medical care if you become unable to communicate. It also helps to ensure treatments align with your preferences, such as the use of life-sustaining measures.

A power of attorney is equally important, as it offers protection over your financial affairs in the event you cannot. This document is used to appoint a trusted person to manage your affairs if you are incapacitated.

These documents are just a few examples of the legal tools you can use to maintain control over your health and financial affairs, regardless of unexpected life changes.

Every adult should consider creating an estate plan. As noted above, it is important to tailor the plan to your specific situation. Be wary of any one-size-fits-all approach, as it may have unintended consequences for you and your loved ones. An estate plan tailored to your needs not only protects your assets but also helps to better ensure the protection of your health and financial preferences, even if you are not in a position to vocalize them.