Many people in Pennsylvania who are looking into estate planning begin with the same question: Where do I start? Anyone who has done even a cursory bit of research probably knows that there are plenty of options to consider when it comes to estate planning – but what you ultimately end up with will depend on your own unique financial and family situation.
Basic building blocks
So, what are the basic building blocks of an estate plan? Well, as a recent news article noted, the key components are usually: a will; trusts; power of attorney documents; and a “living will,” sometimes known as a “medical directive.” A will is a key document to setup a plan for the distribution of your assets and payment of debts. For those with minor children, a guardian for those children can also be nominated in the will.
Trusts don’t necessarily come into play with every estate plan, but they do when a person has, for example, assets that they want to pass on outside of the probate process, or that they want to maintain a level of control over. For instance, if you are concerned with the impact your assets might have on a designated beneficiary, you could setup a trust to dole out funds over a period of time, instead of all at once.
Power of attorney documents allow you to appoint another person, or multiple people, to make important financial and healthcare decisions on your behalf. Oftentimes, this is a trusted family member, but there are times when another person might be more appropriate, like for those who have business assets they want controlled by a partner, for example.
A “living will” allows you to provide instructions for what type of healthcare you would like to receive if you become incapacitated. With those instructions, healthcare providers will be able to understand your preferred approach to certain types of medical treatment, like life-saving care or life support.