Birth and death are the only true certainties in life. Despite this fact, according to sources, only roughly 40 percent of Americans take the time to devise a will. Even in cases where an individual doesn't think he or she needs a will, having one is ultimately an act of love. A will can save those left behind the emotional pain and stress of having to hunt down information related to important matters which must be attended to upon an individual's death.
So let's start with the basics: a will. A last will and testament provides the foundation for a comprehensive estate plan and allows an individual to direct how assets are to be distributed upon their death. A will is especially important for parents with minor-aged children as it allows parents to name a legal guardian in the event both die.
As part of a will, an executor of an estate should be named. This individual may be a trusted relative or friend or a financial or legal professional. An estate executor will ensure assets are distributed according to a will and make sure any outstanding debts are paid.
In addition to a traditional will, individuals are advised to also draft a living will. This legal document allows an individual to express his or her wishes in the event of a medical emergency where some sort of medical intervention is necessary to sustain life. Through a living will an individual is able to express his or her wishes at a time they would otherwise be unable to do so.
Because a living will is often subject to interpretation, it's wise to also name a healthcare power of attorney that can advocate for and make sure an individual's wishes with regard to medical interventions are followed.
These are just some of the basic components that often provide the foundation of an estate plan. In our next blog post we'll continue to discuss additional estate planning tools as well as provide advice on how to effectively communicate the contents of a will to family members.
Source: CNN, "10 steps to painless estate planning," Martha White, March 3, 2014