On our blog, we've discussed the importance of creating a will before it's too late. A will puts in writing who will take care of your minor children and who will get your assets in the event of your death. Having a will is very important. Depending on what you all want to include in your will, it is a relatively simple process to make one.
If you've been thinking about creating a will: good for you. Millions of Americans still don't have a will despite the benefits and protection they offer. Having a will is important but there are other considerations to make when thinking about or creating your estate plan.
In addition to having a will, you should consider a few other important documents in your estate plan that can make a significant difference for you and your loved ones. If you have a life insurance policy or retirement account, make sure you have added or updated your beneficiary. The beneficiary for these accounts will receive those funds regardless of what you put in your will. Make sure you update beneficiary designations as necessary.
You may want to consider having a financial power of attorney. This legal document allows someone else to make financial decisions on your behalf if you can no longer make those decisions. You are able to designate how much power your agent has and what decisions regarding your finances he or she can make.
In addition to thinking about having a financial power of attorney, you may want to have a medical power of attorney as well. This document names someone to make medical decisions for you if you are no longer able to do so. The person named will be able to access your medical records and talk to your doctors and health care facility. A medical power of attorney can also make sure your end-of-life decisions are honored and can alleviate your loved ones from having to make these difficult decisions.
Source: WTOP, "Estate planning basics: Three things you need besides a will -- and why you need a will, too," Barry Glassman, Dec. 11, 2013