While many of us think of estate planning as something for other people (especially rich people), the reality is that everyone needs to think about what will happen to them as they advance toward the end of their lives.
Estate planning is especially important because you never know when something unexpected will happen to change the situation for you and your family. Here are some of the estate planning documents that Liz Davidson at Forbes suggests you have, no matter your income level:
- Living Will: Specifies what you want in terms of end-of-life care.
- Health Care Proxy: This is also referred to as health care power of attorney. In any case, this is the person you designate to make health care decisions for you.
- Durable Power of Attorney: This is the power of someone else to make financial decisions on your behalf if you are incapacitated. This ensures that your finances are taken care of.
- Last Will and Testament: You are probably familiar with the concept of this document. It includes information about what should happen to your assets, and who should care for your children.
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Your heirs might still have to go through probate, even if you have a will, and it’s important to note that beneficiary designations on accounts (like life insurance and retirement) trump what’s in a will.
There are also a number of other arrangements that you can make, depending on your situation. From ensuring “rights of survivorship” in the event of joint property, to creating a living trust, there are a number of solutions that can help you make sure your assets are properly used.