An estate plan is a plan to handle your assets if you become incapacitated, and to distribute your assets at your death. A plan can be very simple, e.g., a will, or involve one or more trusts and related documents. Most people do need an estate plan. The type of estate plan you need depends on your assets and your ideas about who should receive your assets at your death.
A will is the legal statement of a person’s last wishes as to the disposition of his or her property after death. It instructs the probate court how to distribute your assets after all debts, taxes and costs of administration are paid.
The executor has three main jobs:
- Gather together the assets of the estate;
- Pay all the valid outstanding debts of the estate; and
- See that the estate is distributed in accordance with the terms of the will.
It is a good idea to update your will and/or estate plan every few years or after the occurrence of significant life events such as marriage, divorce, the birth of a child, or adoption. Even if you haven’t experienced any of these events since you last updated, there may have been changes in tax laws or changes in your financial situation that necessitate a reevaluation of your estate plan.
- Will and perhaps trusts
- Healthcare Power of Attorney: This names a person to make medical decisions on your behalf if you are unable to do so. You can also authorize this person to discontinue (or not start) life support procedures, if you are terminally ill or in a persistent vegetative state.
- Durable Power of Attorney for Assets: This document enables the person named to deal with your property, as you would, during your lifetime.
- Declaration of Desire for Natural Death: If you do not wish to be kept alive by extraordinary means if you are terminally ill or in a persistent vegetative state, you may make your wishes known in this document.