When you die without an estate plan in place, you run the risk of your loved ones having to jump through hoops and work their way through the court system before they receive any part of your estate. Without an estate plan, you may also leave loved ones scrambling to figure out what to do with any minor children you may have, among other possible hurdles.
The good news is, an estate plan does not have to be complex to be effective. If you count yourself among those who put off estate planning for whatever reason, consider creating a simple estate plan that helps you accomplish several key objectives. When doing so, consider including the following elements.
You may use your will to dictate who you want to have your assets after your passing. You may also be able to use the will for other purposes, such as naming a guardian for a minor child or children. Dying without a will often takes time and money away from your loved ones, so a will is arguably the most critical component of an estate plan.
An advance medical directive
Creating a living will, medical power of attorney or another type of health care directive gives your medical team and loved ones something to refer to if you become incapacitated.
A financial power of attorney
In addition to a medical power of attorney, you may also want to create a financial one that dictates who you want to have access to your bank accounts and financial information if the need arises.
Ultimately, an estate plan serves as a safety net that helps your loved ones avoid unnecessary legal complications or expenses that may arise in the event of your passing or incapacitation.