Your will is the document that expresses your wishes about how you would like your assets distributed after your death. Although a will is a legal document, it is not automatically enforceable. Instead, a will is presented to the probate court to act as guidelines for how you wish to have your estate managed. Within a will, you can name an executor to your estate and provide guardianship nominations for minor children.
Advance Healthcare Directive
Typically, an Advance Healthcare Directive consists of two parts: a healthcare surrogate nomination and a living will. A healthcare surrogate is empowered to make medical decisions on your behalf if you should ever become incapacitated or unable to communicate your wishes. A living will provides your end-of-life preferences to guide the surrogate. This part of the directive indicates which medical treatments you would like performed in an attempt to prolong life.
Durable Power of Attorney
Power of Attorney, unlike a will, is effective during your lifetime. It provides guidance for who you would like to take control of your financial matters if you should ever become incapacitated.
Revocable Living Trust
A revocable living trust is a common estate planning tool used to avoid the time, cost, and public nature of probate. Without a trust, assets pass through probate court before they are distributed to heirs. A living trust, on the other hand, takes ownership of your assets while you are still alive. However, you can appoint yourself as the trustee, so you retain control of all of your assets. If you become incapacitated or pass away, control of the assets passes to the successor trustee, who you name. This person will be responsible for administering the trust in accordance with your instructions, which lay out when, how, to whom, and in what increments, the assets should be distributed.
If you do choose to use a trust as part of your estate plan, it is still a good idea to create a will. A pour-over will can act as a catch-all for any assets that are not transferred into the trust or through a beneficiary designation. The will can also serve an important function if you have minor children — you can use a will to designate guardians.