While every estate plan can be tailored to meet the specific needs and wishes of one person, some universal factors should be included in every estate plan.
It may help to think of an estate plan like a personal motor vehicle: regardless of the make, model, and year of the vehicle in question, all of them will need wheels, brakes, headlights, seats, and seatbelts to operate correctly.
- Wills and/or Trusts
A will or trust allows an individual to spell out exactly how they want their assets handled after they’ve passed away. Both options prevent any confusion over the assets in question, which can prevent any beneficiary or family member from attempting to override the details within the will or trust.
In addition to naming the beneficiaries of your assets, a will can also communicate any wishes you have regarding the care of any surviving people or animals that were in the individual’s care. If you want your sibling to raise your children, for example, you can make that wish known in the will. If you have a pet that needs a new home, your will allows you to name the preferred person or location for the animal.
- Named Beneficiaries
These can include friends, family, pets, organizations, schools, social clubs, and a variety of other potential candidates.
- Clear Instructions
When writing a will or trust, be sure to avoid ambiguous language. If you want your great-uncle to inherit your property, don’t write, “My property will go to a responsible member of the family.” Wills and trusts require your wishes to be exact to prevent any arguments over the assets.
Don’t assume this rule should only apply to individuals with many assets, either. If your only asset is a 1967 convertible with no engine and you don’t specify who gets the car in your will, the named beneficiaries could spend a lot of time and money arguing over should inherit an inoperable vehicle.
- Power of Attorney
Every estate plan requires a person or persons that can be trusted by the estate plan’s creator to make sure their wishes get honored to the letter. So one of the first things to include in your estate plan should be naming the parties that will have a durable power of attorney for your estate plans.
Anyone can be granted durable power of attorney by the individual; typically, spouses and family members get named to the position, although friends and professionals can also fill the role. Without power of attorney, the fate of an individual’s assets may be decided by a judge, which might create issues for the intended beneficiaries.
This can be a big task. In addition to being empowered to make legal decisions on the grantor’s behalf, the parties with power of attorney may also have to stand up for the grantor’s rights in the event their wishes get called into question.