What are the Basic Elements of Estate Planning?

Setting up your financial future is an important aspect of caring for your loved ones. Making a plan now to meet your financial goals will ensure they are taken care of after you’re gone. Any wealth management advisor would tell you that estate planning is a must for anyone who has financial assets and possessions they want to leave to their family.

To ensure that your assets are distributed according to your wishes, you should understand the basic elements of estate planning.

The 4 Basic Elements of Estate Planning

Last Will and Testament

Outlined in your will are your specific wishes for your assets at the time of passing. This will include the names of the individuals receiving your assets. Unless you’re willing to allow the state to determine the distribution of your assets according to the law, you should be specific in your plans.

It should be crystal clear how you want your possessions to be distributed to your heirs. Aside from allowing them to skip the probate process, a will also prevent possible issues and disagreements.

Healthcare Power of Attorney, and Living Will

When you’re unable to make healthcare decisions yourself, you need to have a healthcare power of attorney (HPOA). This signed legal document names a specific person to serve as your healthcare decision-maker. Furthermore, a living will is an advanced medical directive that indicates your wishes for medical care if you’re unable to communicate, terminally ill or incapacitated.

Financial Power of Attorney

This legal document names the person whom you want to make the financial decisions on your behalf in the event that you’re incapacitated or unable to make the decisions yourself. This covers investment decisions, bill-paying, and other financial concerns.

A Trust

This refers to a legal entity that owns your assets while you’re still alive or upon your death. The legal document that named this entity outlines your wishes on how your assets will be controlled.

Talk to a Wealth Management Advisor!

If you want to know more about estate planning, schedule an appointment with the financial experts at 1879 Advisors today.

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