4 Things That Should Go Into Your Estate Plan

No one likes to think about their mortality, but estate planning is a crucial legal process that ensures all your assets pass onto your heirs without any complications. Dividing assets through contested probate can be lengthy, expensive and painful. Because you're no longer there to have any input about what happens to your assets, there's no way to guarantee that your family members get the support you need.

Fortunately, estate planning software simplifies how people plan for the inevitable and organize their finances. But what should go into your estate plan?

Will

A will is a legal document that dictates how you want your assets distributed. While many believe that wills are only for the wealthy, that's untrue. Everyone should have a will. It makes your wishes clear and serves as a roadmap for probate court.

Working with a wealth management company and lawyer is important when drafting your will. It should be consistent with your wishes while complying with state laws.

Power of Attorney

A power of attorney (POA) is a legal document that allows someone else to act on your behalf. If you're ever incapable of making crucial decisions about your health or finances, your POA will take over. Without one, courts will intervene.

You should use your estate planning software to ensure you have a durable POA in place. Give this power to someone who understands your wishes, such as a close family member or lawyer.

Beneficiary Designations

Another critical part of your estate plan is beneficiary designations. As the name implies, these documents dictate who gets your assets. Some assets, such as your 401(K), can pass to heirs without specification in the will. But, they need a beneficiary designation.

Without naming beneficiaries, courts must decide who gets your assets.

Letter of Intent

Finally, it's wise to include a letter of intent. These letters are simple and typically go to your will executor or beneficiary. Their purpose is to define specific details about an asset. For example, you can use the letter of intent to guide executors or beneficiaries in what to do with property or funds. They're also good for delivering funeral details.

Letters of intent aren't legally binding. But if your will is invalid or there are other issues during probate, the letter can inform judges of your intent.

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