Today marks the beginning of National Estate Planning Awareness Week, which was created to help the public better understand this important area of financial wellness.
Estate planning is a little different for everyone. While you are alive, the estate planning process allows you to manage and preserve your assets while you are alive. At death, your estate plan allows you to conserve and control their distribution after your death according to your goals and objectives.
There are five documents that you should consider regardless of your age, health and wealth:
1. Durable power of attorney (DPOA), which authorizes someone to act on your behalf should you become physically or mentally incompetent to handle financial matters. The person you designate in the DPOA can pay bills, file taxes, direct investments, etc. on your behalf.
2. Advanced medical directives allows you to specify the medical treatments you desire in the event you can’t express your wishes and appoint someone to make decisions for you. Without this document, medical care providers must prolong your life using artificial means, if necessary. The three types of advanced medical directives are a living will, a durable power of attorney for health care, and a Do Not Resuscitate order.
3. Will. The crux of any estate plan, a will distributes your property as you wish after death. Without a will, disbursements are made according to state law, which might not align with your priorities. In addition, a will names an executor to manage and settle your estate as well as a legal guardian for any dependents. Since this is a legal document, it is crucial that your will be well written and articulated so that it is properly executed under your state’s laws.
4. Letter of instruction is a non-legal document that may accompany your will to express personal thoughts and directions. Unlike a will, the letter of instruction remains private and its…
The post 5 Documents You Need To Avoid Costly Estate Planning Errors appeared first on Liberty Investor™.