Anyone in Greensboro, North Carolina who is developing an estate plan will create several foundational documents. Even though the laws that govern these documents differ between states, and the individual documents you create, will be different than those other people create, the types of documents most people have are the same. There are a handful of documents that almost everyone will include within their plans, and educating yourself about these can help you better understand the estate planning process.
The estate planning document most people ask their lawyers about is their last will and testament, or will. Wills give you the ability to state your choices and have them honored after you are dead. Even if you create a comprehensive estate plan that relies more heavily on other devices, a will is always something you must include in your plan.
Powers of Attorney Documents
Even if you are in good health, there may come a day when you are not. As we age, we tend to lose many of our abilities, including the ability to make our own decisions. Powers of attorney give you the ability to transfer your decision-making authority to someone you choose. These documents typically divide decision-making responsibilities between financial and healthcare arenas, allowing you to name one or more people to make these key decisions for you when you can no longer do it yourself.
A living will, like your will, allows you to express your choices. But the difference between a living will and a last will and testament is that a living will comes into effect while you are still alive. Wills only come into play when you are dead, but through living will you get to choose what kinds of healthcare treatments you want, or don’t want, to receive.
Depending on your circumstances you might create one or more types of trusts as a part of your estate plan. Trust documents, known as trust instruments, set out why you want the trust to exist, name the important people in the trust, as well as include any other rules or conditions you choose to create.
The type of trust you create will provide you with one or more benefits. For example, some trusts allow you to decrease the size of the estate that will be subject to estate taxes, while others give you the ability to avoid the necessity of your property having to first go through probate before your heirs can inherit it.
Although the above documents are commonly used in almost every state plan, they don’t represent all the tools available to you. An estate plan is like a jigsaw puzzle, where each piece fits into the other so that together they form an entire picture. The documents you create have to work together in order to provide you with the most protections possible.
If you have any questions about your essential estate planning documents, or believe you might be missing something, talk to your estate planning lawyer today.