When you’re creating your estate plan, you have to think about more than just your will. These are several other components that can help to make your wishes known. One thing that most people don’t realize is that some parts of the estate plan are used before you pass away.
For most people, a will, trusts, living will and power of attorney designations are part of the estate plan. Each of these covers a different aspect of your wishes. The living will, which outlines your medical care desires and limitations, and power of attorney for health care, which gives someone the ability to make medical decisions for you, provide a plan for your final days if you become incapacitated.
Your will and trusts pass along your assets to the intended recipient. You also have the option of transferring some assets via payable on death designations on certain financial accounts. This includes checking and savings accounts, as well as the beneficiary on the life insurance policy. Anything with a payable on death designation doesn’t need to be included in the will or any trust.
You may also consider writing out a letter of instruction; however, this isn’t part of the official estate plan. Instead, it provides valuable information for your loved ones about things like where they can find your important documents, as well as other information you’d like to relay. This is kept somewhere they can find it and isn’t part of the official estate plan, so they don’t have to wait on probate court to get the information. Working closely with your lawyer can help you to discover ways to set things up so they take stress off your loved ones.