“What happens when you die?”
Some create stories about it; some do everything they can to avoid it, while some are afraid of even thinking about it. No matter how you go about it, death will always be inevitable. Whether you are walking, sprinting, or running, we all move towards it—our ultimate destination.
The thing is, thinking about what happens after your death is important. Indeed, you can’t bring your wealth with you to the grave, but if you have personal possessions or financial assets you’d like to leave to your family and friends, you will need to learn all about estate planning.
What Is Estate Planning?
Estate planning involves creating a legalised plan that ensures your wishes are carried out in the event of your death. This also ensures that the management of your financial obligations is properly handled in case of your incapacitation.
Learning about the components of estate planning is essential in determining what it is that you need for your situation and ensuring that your wishes will be fulfilled.
The Components of an Estate Plan
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Last Will and Testament
The Last Will and Testament, also known as the will, is a legally binding document that outlines how you want to distribute your assets in the event of your passing. This document is one of the most important components of your estate plan because the lack of a will means leaving the decision-making to the state.
If you want to make a few small changes to your will after its creation, you can create a codicil—which is an additional or supplementary will made after the original one.
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Healthcare Power of Attorney
A healthcare power of attorney (HPOA) is a document in which you assign another person to make medical decisions for you in the event that you are not able to do so. You should choose someone that is trustworthy, reliable, and shares the same views as you because they will have your life on their hands.
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Medical Derivative
A medical derivative, also known as a living will, details your wishes regarding life support or medical intervention in case of incapacitation or inability to communicate. Putting this kind of plan prevents your family and friends from having to guess what you want and end up doing something you would be against.
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Financial Power of Attorney
The financial power of attorney is similar to an HPOA, except this grants who will manage your funds and makes the financial decisions for you should you become incapacitated. The person you choose would become your legal representative when it comes to money matters. Without this document, no one will have the right to handle any of your financial assets.
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Trust
A trust protects and preserves your assets for the future use of your descendants or dependents. Setting up a trust is often used for people who may not be able to handle the assets responsibly, like minors or the elderly.
Conclusion
Although you can’t control when your life ends, you do have the power to manage your assets once you pass on. Developing a solid estate plan is essential not only to you, but also to your loved ones too. This ensures that your family is cared for, and your wishes are followed as you would want it!
Looking for ways to get more out of your life? Work with our financial planners at New Wave Advice! We are a team of young, dynamic, and forward-thinking financial advisors, embracing the best technologies to tailor the advice process to each and every client. Contact us now to have a quick chat about how we might be able to help you.
