There are several different components of an effective estate plan that our readers should be aware of. An effective estate plan protects both the estate planner and the estate planner's family. It can ensure that assets are distributed according to the wishes of the estate planner and that the estate planner's family does not have to worry about matters concerning the estate at a difficult time.
There are several components for a comprehensive estate plan. Effective estate planning involves several different types of documents, including a will, trust, advanced health care directive, power of attorney and HIPAA form. A will designates how the estate planner wants their assets to be distributed. There are important requirements for a valid will, so it is essential for the estate planner to be familiar with what those requirements are. A living trust or other type of trust is also an important component of an estate plan that can provide greater flexibility, confidentiality and less cost, but a trust must also be properly funded so, like a will, it is important for the estate planner to be familiar with the rules of a trust.
A power of attorney is also a valuable part of an effective estate plan. A power of attorney can designate an individual to handle the estate planner's financial affairs if the estate planner is unable to do so. Similarly, an advanced healthcare directive lists the estate planner's wishes regarding their medical care in the event they are incapacitated and cannot communicate those wishes for themselves. In addition, it can be used to designate an individual to make healthcare decisions for the estate planner if the estate planner is incapacitated. A HIPAA release form also provides access to the estate planner's medical records.
An effective estate plan does not have to be a complicated consideration. With a little help, anyone considering an estate plan can have their concerns put to ease and develop an effective estate plan, which will also provide them with the comfort and peace of mind that family members will be taken care of.
Source: Forbes.com, "5 Key Estate Planning Documents To Help Avoid Family Conflicts," Michael Chamberlain, Oct. 21, 2011