Estate planning largely focuses on the division of assets. These assets are divided through the will, placed into trusts, given as gifts or otherwise passed on to the next generation. The estate plan is just a plan for how all of this should take place.
This is a good place to begin your estate planning journey, but don’t assume that simply dividing the assets goes far enough. The truth is that there are a lot of different estate planning tools that you may find useful, such as a power of attorney.
What does the power of attorney do?
When you use a power of attorney, it’s a document that selects an agent and gives them the legal ability to act on your behalf.
This is very beneficial in situations where an elderly person may become incapacitated. If you’re concerned about a future where you’re not able to make your own decisions – even if you’re still relatively young and you think that future may be decades away – then it can give you peace of mind and security to choose someone else.
The main two types of powers of attorneys are medical and financial. On one hand, you need someone who can make medical decisions for you and talk to your doctors about what type of care you want. On the other, you need someone who can do things like paying the taxes or the other bills that you still have. Once you set up these powers of attorney, you know that people you trust are ready to take control if the need should arise.
Be very sure that you carefully consider all of your options when making an estate plan. You don’t want to overlook these useful tools.