If you are nearing retirement, you may be thinking it is time to create your estate plan. However, people of every age can enjoy the benefits of an estate plan because anyone can tailor the plan to his or her individual needs.
There are many helpful estate planning tools, but you may want to begin with some basics. Here are four documents that can provide peace of mind for you and your family.
1. The will
Your will carries your instructions as to the distribution of your assets after you die. The will also names the person you choose to wind up your affairs, such as paying debts, filing your final tax returns and making distributions to beneficiaries.
2. Health care power of attorney
Through the health care power of attorney, you appoint an agent who can make medical decisions on your behalf if you are unable to do so because of incapacitation or mental incompetence.
3. Durable financial power of attorney
Just as you appoint someone to manage health care decisions, you can also appoint a trusted agent to manage your financial affairs if you cannot do so.
4. A will with trusts for children
If you have concerns about the distribution of assets to children when they reach the age of 18, a will with trusts for children can protect those assets until they reach a more mature age or an event such as college graduation. Holding aside the trust funds makes it less likely that your children will spend their inheritance foolishly.
