There are five main components in an estate plan, however, your estate plan does not have to include all five of them as your circumstances may not warrant them. However, if you do have reason to include all five, then it is a good idea to do so. Here is a look at what the five components are that make up an estate plan.
Components of an Estate Plan
1 - A Will
You should know what a will is, but if you don’t, it is a legally binding document that outlines how your assets will be distributed. In other words, it explains who will inherit your belongings, financial and physical. The will should also designate someone you trust to be the executor. That is the person appointed with the task of ensuring the terms of the will are met. Not everything can go into a will. For example, assets outside of probate, such as property in trust, cannot be passed on through a will. There are other limitations that a wills lawyer can explain.
2 - A Trust
A trust is where a third party, normally a financial institution, holds assets “in trust” on behalf of a beneficiary. Although trusts can be designed in many different ways, they essentially do the same thing. They provide a means for someone to receive assets without having to go through probate court and save on the different forms of taxes that enter the picture as estate taxes.
3 - Power of Attorney
This is an important piece of the estate plan puzzle. Should you become debilitated in some way, either through injury or illness, and cannot take care of your daily financial needs, the person you appoint to be your power of attorney can. Think of it as a backup plan in case something happens to you that does not cause immediate death. The person you grant power of attorney can then make all financial decisions for you.
4 - Health Care Directives
Having a clear, concise set of health care directives can take a lot of the guesswork out of the equation should you require medical care but cannot make those decisions yourself. This part of an estate plan should include a healthcare declaration that explains in detail what your medical wishes are so that healthcare providers can deliver them. Sometimes this is called a Living Will.
5 - Final Arrangements
This is the part that essentially wraps up the estate plan. It should contain details on how you wish your remains to be handled once you pass away. Such details may include if you wish to be buried or cremated, and if you wish to contribute to organ or body donation programs. There are several other parts to this final estate plan component that may or may not be necessary, depending on your circumstances. They may include how funeral expenses will be covered, life insurance and guardianship considerations, protecting business interests, designating beneficiaries, and other details a wills lawyer in Brisbane can discuss with you.
The five main components of an estate plan may not be appropriate in your situation. You may only require a Will, power of attorney, and health care declaration. To be sure that your estate plan has what it needs, it is always best to consult with a professional with experience in wills and estate planning in Brisbane.
When you are Estate Planning in Brisbane, Contact GKS Law Today
Thinking of putting together your estate plan? It helps to work with professionals who understand wills and estate law in Brisbane. GKS Law is your local wills lawyer in Brisbane. Call them today to discuss the five components of an estate plan that will ensure your assets and loved ones are protected should something happen to you.
Conclusion
Sometimes it is not easy to think about having an estate plan. For many of us, it is one of those things we’d much rather put off as long as we can. Sadly, if you were to pass away and not have a proper estate plan in place, your assets will not necessarily go to loved ones as you may wish. With an estate plan, you can carefully detail who gets what, and it becomes legally binding. An estate plan often has five different components including a will, trust arrangements (if required), power of attorney, health care directives, and final arrangements. Your family will be taken care of better if you have a proper estate plan.