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What are the Essential Elements of an Estate Plan?

February 19, 2021

The goal of any good estate plan is to provide an easy path for your loved ones and beneficiaries if you become incapacitated or upon your death. There are some essential elements that you should include in your estate plan.

Will or Trust

A simple will is also called a “last will and testament.” A will is the cornerstone of a comprehensive estate plan. It is a document that provides direction for the distribution of assets following your death. If you die without a will, Wisconsin intestate law takes over and your loved ones may not end up with the assets they should. A trust is an option that might be appropriate as a way to provide for your loved ones without excessive inheritance taxes.

A trust is a vehicle that essentially holds assets for those you designate. A trust is one of the best ways to ensure that your minor children get the assets you intend. Trusts can be helpful, but they can be complex. It is best to discuss your trust options with an experienced estate planning attorney.

Durable Power of Attorney

Durable power of attorney gives someone you designate the legal authority to take over your affairs in the event that you become incapacitated or pass away.  There are two main types of power of attorney including the financial and springing power of attorney. A simple financial power of attorney allows the person you designate the ability to handle your finances such as bank accounts, pay bills on your behalf, and more. The springing power of attorney does not take effect until a doctor declares you incapable or incompetent. You should always keep your power of attorney current and review and revise it every several years to make sure that it remains valid.

Designation of Beneficiaries

The designation of beneficiaries is one of the critical parts of the estate plan. You need to provide clear instructions for the distribution of your assets and property. You should name your beneficiaries based on your current family members and loved ones. It is best to review and revise your beneficiaries from time to time, and particularly if your family status changes or when family members or loved ones come or go. If you fail to update your beneficiaries, the people you love may not end up with your assets. For example, if you get divorced, you need to remove your former spouse’s name and replace it when you remarry. Otherwise, your ex could unintentionally end up receiving your property after your death.

Healthcare Directive

A healthcare directive is a document that gives directions for your care if you are unable to make decisions due to incapacitation. A healthcare directive goes by other names including an advance directive and living will. The healthcare directive should include provisions for your medical preferences such as when not to resuscitate, when not to utilize breathing or feeding tubes, and more. The document gives you peace of mind that you will get the medical care you want, and it also makes it easier for your loved ones because they know your wishes.

Guardianship Designation

If you have minor children, you will need to designate someone to care for them if you die. The document should include a clear guardian for your children. You should discuss the details of the arrangement with your potential guardian designees prior to adding them to your estate plan. You may also need to account for financial support for your minor children when necessary. If you do not designate a guardian, your children could end up being placed with someone else.

Estate planning is complex and requires knowledge, training, and experience to develop a plan that is best for your situation. To learn more about estate planning and to get started with your will and estate plan, contact us online or at (608) 784-8310.

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