Estate planning can be an intimidating prospect. It is difficult to think about what would happen if you died or became ill or injured to the point of incapacitation. It is also difficult to decide which estate planning documents you really need and which you can do without.
Your estate plan can be as simple or complex as you want it to be and that your situation warrants. You decide what goes into it. However, there are a handful of essentials that almost every estate plan should have.
- Life Insurance
Even if you do not have much in the way of assets to bequeath to your heirs, life insurance can help cover final expenses and outstanding debts, as well as provide for any dependents you may leave behind. It should not be too difficult to find affordable term life insurance from a reputable vendor. There are actually a number of life insurance products available, so you should be able to find one that fits your needs.
Despite some downsides, most specifically the required probate process, a will is still one of the most essential estate planning documents. This is especially true if you have minor children because, while there are other avenues for passing down assets to them, a will is one of few acceptable ways to name a guardian for your children in the event of the simultaneous loss of both parents.
- Advance Directive
An advance directive can go by many different names, such as a living will. While the other estate planning documents mentioned here only take effect when you die, an advance directive describes the medical treatment you do or do not want to receive in the event of incapacitation. For example, if you do not want to go on life support or be resuscitated if you stop breathing, an advance directive lets your doctors and family members know.
While it may be possible to challenge estate planning documents, courts give your expressed wishes precedence unless someone can show a reason not to.