While everyone may know they need an estate plan and the importance of taking care of affairs in the event of one’s passing, it may be overwhelming and confusing to understand the terms involved. Knowing the definition of basic terms associated with a comprehensive estate plan is the first step to ensuring a plan covers all of the needs of a given family. Michigan families typically benefit by sitting down with a professional and exploring basic terms while deciding upon the right steps to take.
The essential document needed is a will, which is a document basically saying who gets what. It is a document that comes into play after the death of the maker. A living trust is a private document that basically holds assets that are passed on according to the terms of the trust. It is a convenient way to privately leave funds and to stipulate circumstances under which those funds can be used or distributed.
Two important documents to be included in an estate plan that do not pertain to assets are a healthcare directive and a financial power of attorney. The healthcare directive is a vital tool for anyone who has specific healthcare wishes and it gives designated parties the ability to carry out those wishes pertaining to medical care. The financial power of attorney gives someone the power to handle finances if the person is incapacitated. This can be essential when bills need paid or financial matters need handled quickly.
There are many types of documents that may need to be included in an estate plan. However, understanding the basic documents and the purpose of those documents can be a great first step to ensuring needs and wishes are met. Michigan families may benefit from exploring which specific documents may be needed in their particular situation.
Source: benzinga.com, “After Your Funeral, Your Financial Assets Could Haunt: Estate Planning Basics“, Rebecca Sheppard, Feb. 2, 2015
