Quite a few people think of last wills and estate plans as the same thing. They are different, although they often go hand-in-hand in estate planning.
A last will is a specific document that addresses your last wishes and distributes your assets to people you love. An estate plan is a comprehensive plan that explores the end of life and even medical incapacitation. The person drafting these documents is the testator.
In addition to a last will, there are many other documents that the average person will benefit from having in their estate plan. Additional documents can help testators relay their wishes to others and protect themselves from unforeseeable future experiences.
1) An advance medical directive
Your estate plan can govern not just what happens when you die but also what occurs if you experience incapacitation, like a coma. After a car crash or a stroke, your family members may not know what medical decisions to make on your behalf.
An advance medical directive outlines everything from your opinions about pain medication to your thoughts on life support so that others can uphold your preferences. You may even file it ahead of time with the physician or hospital that typically provides your care.
2) Powers of attorney
Maybe you want someone other than your spouse to make medical decisions on your behalf. Perhaps you have a small business or own a home, which means you have financial obligations.
Powers of attorney can transfer some of your legal authority to someone else in the event of your incapacitation. They could pay your bills, handle business transactions and even file your taxes. Powers of attorney authorize others to speak for you when you can’t take care of yourself.
3) A letter of intent
Your last will may be where you describe your legacy preferences, but you can’t always include all of the details or explanations of why you made certain decisions regarding your estate.
You might include special instructions for your executor or even an explanation of why you gave people certain property or chose to disinherit a family member. When others understand your reasoning, it will make it more likely that they will comply with your instructions carefully.
Integrating different documents into your estate plan helps maximize the benefits that you obtain from taking control of your own legacy.