Estate planning is the act of drawing up legal documents that set out the terms and conditions by which your assets – money, stocks, property, and so on – will be distributed after your death. It’s an important step for anyone who has a family they hope to take care of even after they’re gone.
Different people will have different needs for their estate plan, depending largely on how large their estate is, and how complicated their plan for distributing that estate after their death.
But that said, there are certain standard documents that will be part of almost any well-executed estate plan. These include:
- A will, which outlines what part of your estate is passed on to which parties, including any conditions or stipulations.
- Guardianship designations, which determine who becomes the legal caretaker for any dependents you leave behind.
- A healthcare power of attorney statement, which unambiguously defines who has power to make medical decisions on your behalf in the event that you become incapacitated.
- Beneficiary designations, which determine who receives specific benefits such as life insurance policies.
- A letter of intent, which spells out your thinking and intentions behind why you’ve made the decisions that you’ve made.
The primary benefit of estate planning is making sure that your loved ones are taken care of after you’re gone. With a proper estate plan in place, you’ll make sure that they receive the monetary support that you want them to have, and that there is a plan in place for taking care of any unfinished business and debts that you yourself had. This prevents your family from having to make such hard decisions on your behalf, and frees them up to be with one another and focus on processing their grief together.