As Tennessee residents grow older, many are focusing on building an estate plan. However, as Forbes points out, estate planning is important for people of all ages, health and financial status. Also, by ironing out the details for the five main estate planning documents, people of all backgrounds may avoid costly errors. Errors could affect their estate and the family members to which property is entrusted upon that person’s passing.
The first document Forbes recommends is a durable power of attorney. The person authorized with this document can complete a number of tasks, such as filing taxes, investing and paying bills. Advanced medical directives are also important and may include a Do Not Resuscitate Order, living will and power of attorney for health care. These help to dictate medical treatment in the event that a person is unable to make decisions for themselves.
A document more commonly known when it comes to estate planning is the will. If there is no will in place, wishes made known in passing may not be upheld as valid alternatives. Instead, the state generally distributes assets as per state law.
Sometimes accompanying a will is a letter of instruction. This may share directions and personal thoughts and is typically not legally binding. Finally, there is the living trust. This leads to ownership of property by a separate entity, which can safeguard assets from probate and lead to distribution in a timelier manner.
Forbes also recommends transforming estate plans into legacy plans. While this is not ideal or desirable for everyone, for wealthy people who wish to ensure the assets left behind lasts for several generations, a legacy plan could be useful. The problem with this mindset is of course that while admirable, not every child or grandchild wishes to follow in a parent’s or grandparent’s footsteps.