Making an estate plan ensures that your assets, possessions and property are distributed amongst your loved ones in the way you want them to be when you die. The primary component of any estate plan is a last will and testament. The PDF attachment looks at what this document is.
However, there are often more aspects to consider, such as guidance on the guardianship of minors and instructions for what to do should you become incapacitated or incapable of making medical decisions.
As an attorney-at-law, Dr Edgar Paltzer specialises in helping clients with the legal aspects of estate planning.
Key Components of an Estate Plan
There are 7 key documents that make up a comprehensive estate plan:
- A will or trust
- Durable power of attorney
- Healthcare power of attorney
- Beneficiary designations
- A letter of intent
- Guardianship designations
- Mandate in case of incapacity
Alongside these documents, you may also wish to include various insurance products, such as life insurance – which means money can be passed on without probate – or long-term care medical insurance to provide for healthcare costs in old age.
Identifying Assets
Life is more complex today than ever and the same is true for assets.
Many of us have multiple assets – ranging from the property we live in to pension plans, bank accounts and savings accounts, and even digital assets such as wedding photographs – that we want to distribute amongst our loved ones when we pass on.
An estate plan clearly details how you wish these assets to be distributed, including which family members and friends are going to be beneficiaries and whether any assets are going to go to charity. Identifying all assets, both physical and non-physical, allows you to create a list where you can note down who you would like to take possession of each asset.
Taking Note of Debts
Before any of your assets can be distributed, any outstanding debts you have will need to be paid. These may include a mortgage, loans, credit cards or any other lines of credit you have taken out. Take account of how much it would cost to pay these off and which assets can be used to repay debt before you begin dividing goods among loved ones.
You can view some statistics for estate planning among the millennial generation in the infographic attachment to this post.