Everyone needs a plan.
An estate plan consists of documents that every adult should have. A will or a trust outlines your final wishes and whom you would want to be in charge of carrying out those wishes if you should die. A healthcare power of attorney (sometimes called a living will or an advanced healthcare directive) is really a gift to your family. It ensures that if you can’t speak for yourself due to incapacity, your family knows what your end-of-life care decisions are and then gives someone of your choice the power to carry out those wishes. A durable power of attorney does the same thing for your finances: it allows someone you name to do things such as pay your bills and file your tax returns if you can’t.
Planning protects your children.
People often assume that when they are gone, the person they would want to care for their children will be able to do so. However, unless you designate that person in your will, the court will decide and select the blood relative the court feels is best suited even if that wasn’t your preference.
You can prevent family conflict.
Once you have outlined your wishes make sure to tell your loved ones. Sometimes, in an effort to keep the peace or avoid an unpleasant subject, people withhold information from their loved ones. You may have a good reason for leaving an unequal gift among your children, or for naming one sibling to be executor over another, but you’re better off telling them now while you can explain your decisions.
The right person will be named for the job.
You may have heard that if you don’t have a will or trust in place, state law will step in and decide how your property should be distributed. In accordance with state law, a judge would also decide who should oversee managing your estate. Discussing your decision with your children and even considering hiring a corporate trustee can help alleviate potential stress for your family.