Regardless of your age or the number of assets in your possession, you must have a solid estate plan in place. As explained by U.S. News & World Report, a reliable estate plan can protect your family after you are gone, but it can also offer protections while you are still alive.
In order for it to perform these crucial roles, your estate plan must contain certain elements. Along with creating a last will and testament, here are a few ways to ensure success.
Health care representative
There may come a time when you are unable to make your own health care decisions. Having a health care representative in place ensures your family and medical team honor your final wishes. While a living will also explains your medical wishes, a health care representative can communicate them directly. Make sure the person you choose is responsible and willing to carry out your desires, despite their own personal beliefs.
Beneficiary designations
Things like life insurance policies and retirement accounts have beneficiary designations, which include the name of your chosen heirs. Beneficiary designations always trump whatever information within your will, so you must ensure they are correct. Additionally, you must also change your designations if there is a change in your life that warrants it.
Financial power of attorney
Like a health care proxy, a financial power of attorney acts on your behalf if you are unable due to incapacity. However, this person is responsible for making financial decisions on your behalf. For instance, they can pay bills and taxes, sell real estate, and perform other financial functions.
After creating your plan, make sure you revisit every few years or so to ensure it still meets your needs. You should also make updates after divorce, new marriages, and the birth or adoption of a new child.