3 key components every estate plan should have

Having a basic estate plan in place may work wonders when it comes to giving you peace of mind and letting you plan for your future. If you have neglected to create an estate plan up until this point, you may want to consider how not doing so may leave your loved ones in the lurch after your passing.

An estate plan does not need to take considerable time or money to establish. Instead, you may be able to accomplish several important estate planning objectives by creating a plan that has three main parts: a will, an advance directive and a power of attorney.

The role of the will

Creating a simple will enables you to make decisions about where you want your legacy to go once you die. Rather than leave these decisions up to the courts, your will allows you to name beneficiaries and make distributions as you see fit.

The role of the advance directive

An advance health care directive is a legal document that details your preferences with regard to medical care. Several different types of advanced health care directives exist. They allow you to decide everything from whether you want resuscitation, should the need arise, to whether you want to be an organ donor.

The role of the power of attorney

A power of attorney gives someone you trust the legal right to make financial and, sometimes, other important decisions if you are unable to make them yourself.

Having an estate plan in place often minimizes the expenses associated with probate. It may, too, give you comfort knowing that you outlined your wishes in case you become unable to dictate to vocalize them due to unforeseen circumstances.

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