It is never the wrong time to get your affairs in order. Whether you have recently moved to a new state, or you have experienced a similar significant change in circumstances, you may need a new estate plan to cover you. It is important to know what are the essential documents which you will need for your estate plan. Once you have the essential documents in order, you can then consider additional tools to incorporate into your estate plan.
There are three essential documents that you need in your estate plan
When you are organizing your estate plan, there are three documents that will always be a part of your estate plan. The first and most important document is your last will and testament. Your will is where you can indicate what will be done with all of your assets, as well as who will care for any minor children you may have. The reason why you need a will is because, without one, your assets will be distributed according to the rules of intestacy, or default rules of the state.
The second document which you will need is a power of attorney. This document allows you to identify an individual who is empowered to make financial and legal decisions on your behalf. There are two types of powers of attorney, the ordinary version which takes effect as soon as it is created, and the springing power of attorney, which takes effect only if you are incapacitated or otherwise rendered unable to make decisions.
The final essential document that you will need is an advanced directive, also known as a living will, a medical power of attorney or a medical directive. These operate similarly to a power of attorney, where you can designate a person to serve as your decisionmaker for medical treatment if you become incapacitated. The same person can serve to enforce both your power of attorney and your advanced directive in your estate plan.
Additional documents can be incorporated into your estate plan
Beyond the three documents outlined above, there are several other documents that might be relevant to your estate plan. The most popular would be a trust, a legal tool for holding assets either for your benefit or for the benefit of another. A trust can be created at any time during your lifetime, and a testamentary trust can be created as part of your will to control property and assets for your heirs and beneficiaries.
Other documents can include an insurance plan, a guardianship designation and a special needs trust are all other documents which may be necessary to your estate plan, depending on your situation and needs. A skilled estate planning attorney can help you determine what additional documents you need and how to structure them to best accomplish your goals.