Whether you are just starting a family or have already retired, if you are like many Americans, you may have avoided planning your estate. According to a 2021 survey by Caring.com, two out of every three U.S. adults do not have a will.
You may assume that you do not need a will because you are not wealthy, but, without a will, you may lose control over what happens to your assets after your death. However, wills are not the only estate planning tools you may want to consider.
1. Living trust
Even with a will, many of your assets may have to pass through a lengthy court-supervised probate process before reaching your beneficiaries. Transferring money and other property to a living trust, also known as a revocable trust, may help to ensure that assets pass to your heirs more quickly.
2. Power of attorney
If you become ill or incapacitated, you may not be able to handle your finances on your own. Power of attorney allows you to designate a trusted individual to manage your bills, financial accounts, business operations, personal property and other financial transactions if you are not able to do so yourself.
3. Living Will
A living will, or advance health care directive, offers you the opportunity to inform medical staff of your wishes for end-of-life care. This document allows you to explain what types of potentially invasive life-sustaining treatments you do or do not want to receive if you cannot communicate due to your condition.
When it comes to estate planning, it is never too early to begin putting your affairs in order. However, once you have established a will and other documents, it is also important to review your estate plan every few years and update it if necessary.