What Does a Basic Estate Plan Include?

Whether you are contemplating crafting an estate plan or are already in the thick of the process, it is important to learn about the benefits such a plan can have on your life and the lives of your loved ones. You may be wondering, “What does a basic estate plan include?” Putting in some time now to ask the right questions and explore your options can save you all much time and worry down the road.

Pursuing legal counsel can help you make such decisions. A Fort Mill estate planning attorney can help you assess your unique situation and determine what kind of estate plan may be right for you. There are many options out there, and it can sometimes feel overwhelming to choose which documents to include in your plan. A seasoned estate planning attorney can guide you through making those decisions.

Documents Included in an Estate Plan

Each person’s estate plan will look different because their assets, beneficiaries, and circumstances are unique. However, there are some common documents that are likely to be found in each basic estate plan. Some of these include a will, a trust, a power of attorney, a living will or healthcare directive, beneficiary designations, and instructions regarding the funeral and burial process.

While all of these documents are options that may be included in an estate plan, they are not necessary. In some cases, an individual may wish to draft only one or two of these documents, in which case a lawyer can help them do so and ensure that no assets or beneficiaries are left out.

Wills

A will is a general legal document that gives instructions regarding a person’s assets once they are deceased. This may include anything from their home to their vehicle to their children and pets. A will can typically be structured in any way an individual desires, but an estate planning lawyer can oversee the drafting of the document to make sure it is done properly.

Trusts

A trust is a legal document in which authorization is given for assets to pass from one person or entity to another. In these cases, the trust becomes the actual owner of the property until it is passed on. The beneficiary is the person who receives the assets according to the specific guidelines explained within the document. There are many types of trusts, including living trusts, irrevocable trusts, revocable trusts, and testamentary trusts.

Healthcare Directives

Healthcare directives, also commonly referred to as living wills, give instructions for a person’s health and medical care while they are still alive should they become incapacitated. This document states a person’s wishes regarding their medical care. It can also include details such as where you would like to receive care and who is able to make decisions on your behalf if you are unable.

Power of Attorney

A power of attorney is a legal document that designates a person to act on your behalf should you not be able to perform certain tasks or make certain decisions. This may be regarding your finances, assets, or other areas of life in which you would need to give consent. Your power of attorney may be able to sign documents on your behalf or handle legal matters if you are unable to do so.

FAQs

Q: What Are the Foundational Documents of an Estate Plan?

A: There are various documents that can be included in an estate plan, depending on the needs of the person creating it. One important document is the will, which is a legal document that states the general principles a person wants followed regarding their assets once they pass. Additional documents that may be included in an estate plan are a trust, a power of attorney, medical and healthcare directives, and instructions relating to minors or dependents one is leaving behind.

Q: What Is the Most Important Component of Your Estate Plan?

A: What may be considered the most important component of an estate plan will vary from person to person. For individuals with significant financial assets to leave behind, a will or trust may be the most important part. For someone who is terminally ill or whose family is anxious concerning medical decisions, a medical directive or HIPPA release document may be the most important to them. It is important to find the right documents for your needs.

Q: What Is the 5 and 5 Rule in Estate Planning?

A: The 5 and 5 rule, or 5 by 5 power, in estate planning refers to a clause that is found in many trusts that outlines two ways in which a beneficiary may make withdrawals. The beneficiary has the option to draw either $5,000 or 5% of the trust’s value at a fair market price. Some individuals include this clause in their trust because it allows for flexibility if they are allocating large amounts of money to their loved ones.

Q: What Is the Difference Between a Will and a Living Will?

A: A will is a general legal document in which an individual can outline their wishes regarding their assets and finances and who will inherit those things once they pass. This document goes into effect once that individual passes. A living will, on the other hand, explains the wishes of an individual, including health and medical care, should they become unable to verbalize such wishes. This type of document may allow a family member to make decisions on their behalf.

Mack & Mack Attorneys – Trusted Estate Planning Law Firm

Estate planning can be a confusing and overwhelming process to navigate, especially without legal guidance. There are extensive amounts of paperwork, documentation, and decisions to draft, sign, and make. If you are feeling overwhelmed, a knowledgeable attorney can assist you in analyzing your circumstances and making the decisions that are right for you and your family.

At Mack & Mack Attorneys, we have helped many clients with estate planning over the years, each time guiding them through the process with effortless ease. While supporting you every step of the way, we can help you understand the options you have and the implications that come with each one. Contact us today to learn more about how we may be able to help.