4 Important Components Of An Estate Plan
While having a will or trust is a crucial consideration at any stage of your life, it’s important to note that this is just one component of several involved in planning for your eventual passing. An estate plan is an all-incorporating arrangement that allows your wishes to be followed when you’re incapacitated or no longer alive.
A will can be an excellent starting point, but you may also like to talk to your estate planning attorney about some of the following things.
Table of Contents
Estate Planning Components
Power Of Attorney
When you visit a Huntsville estate planning attorney to talk about estate planning, a power of attorney (POA) is one of the first things they may discuss with you. A POA is someone in your life who can act on your behalf when you cannot make decisions for yourself.
This person may make legal and financial decisions while also having the power to manage real estate. If you haven’t decided on a POA in an estate planning session, a court may determine what happens to your assets if you’re mentally incompetent, regardless of whether their decision aligns with your wishes.
Healthcare Power Of Attorney
A healthcare power of attorney (HCPA) is different from a standard POA that makes legal and financial decisions. HCPAs are people you designate to make healthcare decisions on your behalf when you’re not in a position to do so.
Generally, they are a family member or spouse, or even someone you trust and who shares your views about your recommended treatment. Most estate planners also recommend naming a backup HCPA in case your preferred named person is unable to act when the time comes or is unavailable.
Beneficiary
By naming a beneficiary and a contingent beneficiary in your will or a revocable living trust, you’re able to make sure someone receives assets from your estate when you pass away. These include your bank accounts and any property you may own.
There are three different beneficiary types to discuss with your estate planning lawyer, including primary, contingent, and residuary. Primary is the first person you wish to receive your assets, while the contingent beneficiary is someone you would request to receive your assets if the primary beneficiary couldn’t. You may also name a residuary beneficiary to receive your remaining assets after gifts and debts have been paid.
A Letter Of Intent
A letter of intent is one of the most crucial components of an estate plan as it defines what you hope to happen to your assets after you’re incapacitated or die. Sometimes, letters of intent also outline any particular wishes or special requests you have, such as a specific funeral arrangement.
Letters of intent aren’t usually legally binding documents, but a judge can take them into consideration when determining what happens to your assets if your will is deemed invalid.
There is much more to an estate plan than a will or trust. You also need to factor in who will manage your affairs, who can make decisions on behalf, and what your wishes are for your assets. Working with an estate planning attorney can ensure you have everything in place for when the time comes to say goodbye to your loved ones.
