What Is an Estate Plan and Do You Need One?

When most people think of estate plans, they think of the wealthy. After all, these legal documents often cover the division of assets in the event of death.

However, an estate plan is much more. It’s actually a series of legal documents which may include a will, power of attorney, trust, and a living will. Not everyone will have them all, but they can help your loved ones ensure your wishes are met. Often, the property and assets of those without any estate plans go into probate. A court will then decide how the assets are distributed.

This is why, regardless of your financial status, you should definitely have one in place.

What Are the Estate Planning Documents?

A will details your wishes as to the distribution of your property upon your death. A living will is a legal document outlining your medical wishes—such as a Do Not Resuscitate order—should you no longer be able to dictate them yourself.

A power of attorney gives a designated person power over your affairs. They can make decisions on your behalf. A trust allows you to put a third party in charge of assets on behalf of another.

Is Estate Planning Necessary?

Yes, but it’s also often overlooked by people who don’t believe they need to do it. Estate planning is not just about money.

It’s about property and it’s about healthcare should you no longer be able to make your own decisions. Imagine you get into an accident and your wishes are to forego lifesaving measures, or you don’t want to live your life on a series of tubes. It’s morbid to think about, but for that very reason, you should have your affairs in order.

Isn’t It Just for the Wealthy?

Nope. Even if you’re a middle-class American with very few assets outside maybe a home, you should plan for the future. Nobody can predict it and wouldn’t you rather your wishes be known than to leave your family with difficult decisions?

Sometimes, people fight over the smallest things, such as a jewelry item or a vehicle, after someone passes. By spelling it all out in an estate plan, it leaves little room for argument once you pass away.

What Life Events Call for Changes to Estate Plans?

Estate planning should be considered fluid. In other words, there are a variety of changes you’ll likely have to make as you age.

If you get married, for instance, you might want to update your legal documents to make your spouse your beneficiary or power of attorney. If you have children, you might want to bequeath them specific belongings or property.

What Happens if Your Spouse Dies Before You?

If your spouse dies before you and they were your power of attorney and beneficiary, you’ll have to make some changes. It can be tough to do during a moment of grief, but it should be a priority.

Leaving things in limbo can render your assets frozen for years, especially if your family argues over who gets what.