Most everyone in the Washington, D.C. area has heard that they should have an estate plan. However, that next step of telling people what is included in estate planning doesn't happen as often. It is true that estate plans can vary depending on the needs of the person making the plan, but there are some basics that are applicable to all plans.The four basic estate planning documents that most every person in Washington, D.C. will need are the will, trust, living will and power of attorney. In order to determine exactly what kinds of documents a person needs, a full, detailed listing of a person's assets will be required. This list should include all of a person's assets, including any possible future inheritances. Once that list is compiled, it can be taken to a professional who will then review it and suggest a course of action.Every plan will include a will since this document will ensure that a person's wishes are followed upon death. Without a will, the state gets to determine what happens to a person's property. Trusts can be useful in keeping assets safe from taxes and creditors. Living wills spell out what medical treatments a person wants or doesn't want and appoints someone to make additional medical decisions on the person's behalf. Powers of attorney appoint someone to take over making decisions for a person in case of incapacitation.With the exception of some trusts, estate planning documents are only "activated" by the circumstances for which they were drafted. For instance, a power of attorney or living will is only used when a person becomes unable to make decisions covered by the documents for him or herself. A will is only used after a person passes away. Most of these documents can be changed, if needed.
Source: Fox Business, How to Make Estate Planning Less Complex, Casey Dowd, Aug. 22, 2013