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What are some of the elements of a comprehensive estate plan?

On Behalf of | Dec 16, 2023 | Probate & Estate Planning |

Many people do not have an estate plan in place. A large percentage of those who do, have drafted only the most basic documents. In many cases, someone only drafts a will. These resources help to determine what happens to someone’s property when they die, but they do not provide other protections from life’s uncertainties.

Preparing an estate plan as thoroughly as possible can help to safeguard testators and their loved ones from specific, potential future hardships. A comprehensive estate plan provides better personal protection and peace of mind when compared with an estate plan consisting of only one or two documents.

What should a comprehensive estate plan include?

Testamentary documents

The baseline for an estate plan is often the inclusion of testamentary documents. The most basic is a will, which allows someone to name people as beneficiaries who should receive their property when they die and potentially also appoint a guardian if they have any dependent children.

Some people will use a trust as the primary tool for controlling the descent of their property. They can fund it while they are still alive by transferring assets to it. Other people use pour-over wills to transfer property to a trust after their death. Typically, people also provide instructions, plans or receipts for funeral services and burial plots. A thorough estate plan helps handle all the elements of someone’s death and also any future medical incapacitation.

Living documents

There are certain estate planning documents that are useful while someone is still alive, not after they die. Powers of attorney can give someone the authority to pay bills, take care of property and make medical decisions on behalf of individuals when they become incapacitated. Durable powers of attorney, in particular, can help protect people from involuntary guardianship. Advance healthcare directives can provide clear instructions about someone’s medical wishes so that their loved ones don’t have to second-guess themselves about their decisions.

Estate plans often integrate external resources, including life insurance and financial accounts. Filing beneficiary designations with life insurance companies and transfer-on-death documents with certain financial institutions can be part of establishing a comprehensive estate plan. People may plan to avoid estate taxes, qualify for Medicaid or protect their assets from creditors depending on their circumstances.

Creating a comprehensive estate plan helps people get the most benefit possible out of preparing for the future. Seeking legal guidance accordingly, therefore, is wise for those who do not have comprehensive documents in place.