Four Critical Components Of A Good Estate Plan

Tennessee Williams once famously said: “Ignorance of mortality is a comfort.” While ignorance is indeed bliss, it’s also a comfort that people with loved ones and dependents, cannot afford to have. In today’s post, we’re going to look at the importance of estate planning, as well as the benefits of designating heirs for your assets in case of your untimely demise.

While the word “estate” might mislead readers to think this is only for large landowners, estate planning is for anyone who has assets that they would like to leave behind for loved ones or dependents. The main goal here is to make sure that all your assets are distributed as per your wishes, while also minimizing taxation on whatever you leave behind. 


Additionally, estate planning isn’t just about distributing wealth and you can also delegate responsibilities like in the case where you have children, you can delegate a legal guardian to care for them in case fate doesn’t permit you to. Protecting what you leave behind from taxations by the government is another important aspect of estate planning and it is best to get professional money management services for this. 


There are 4 critical components of a good estate plan that we are listing below:


  1. A will that clearly identifies:

  1. The heirs to your assets

  2. Your children’s guardian

  3. The executor of your will

     

       2)  A power of attorney that will enable:

  1. Someone to make financial decisions on your behalf

  2. Someone to pay bills and make legal decisions on your behalf


       3)   A medical power of attorney to:

  1. Enable your doctor to make medical decisions for you in case you are unable to


       4)   A Trust to:

  1. Minimize estate taxes

  2. Control how your assets are distributed

 

In conclusion, as Surya Das put it so well. “If we accept and internalize the fact of our own mortality, then, by definition, we have to deal with the essential questions of how we live and spend our allotted time.” This means not only making peace with the fact that one day we have to leave this world, but more importantly, ensuring that all our affairs are in order before we go. This not only helps ease the situation for your loved ones who are coping with grief and loss but also prevents ugly legal battles caused by the lack of a proper estate plan.

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