What Does Estate Planning Include?

Estate planning is the process of creating a legal plan for how your assets will be distributed when you die. But many other decisions go hand in hand with this legal process, and there is more involved in estate planning than one may think at first glance. So, what all does estate planning include?

Estate Planning Includes Four Components

The most effective estate planning includes four key components.

1. Creating a combination of legal documents that will accomplish your goals for you, your loved ones, and your assets
2. Creating several non-legal documents that will guide your personal representative and your loved ones through your estate plan when you pass
3. Communicating with your personal representatives and agents so they understand what they will need to do when you pass
4. Maintaining your estate planning documents as you age and your life and relationships change

Creating Legal Documents

Planning for Death

You must decide what to do with your assets when you die.  This is what people typically think of when they think about what estate planning includes. You will likely need a will, a trust, or both to ensure your assets go where and to whom you want when you are gone.

(Related: What Are the Difference Between a Will and a Trust?)

Planning for Incapacity

Estate planning should also include a plan to care for yourself and your assets before your death. Many people become unable to care for themselves before they die and need others to care for them during that time. We call this planning for incapacity.  To plan for incapacity, you will need both an advance medical directive and a power of attorney. An advance medical directive appoints a medical agent and gives them authority to make decisions for you if you become unable to do so yourself. A power of attorney appoints a financial agent and gives them authority to care for your assets and finances if you become unable to do so yourself.

Creating Non-Legal Documents

The legal documents are critical, but don’t stop there. You should also create several non-legal documents that will help your personal representative and family carry out your wishes once you are gone. Ethical Will: An ethical will is a written or recorded documentation of your values, morals, and life principles that you desire to pass on to your loved ones or your community. Many people find that this is the most powerful and encouraging part of an estate plan. Estate Guide and Inventory: The estate guide and inventory lists important information that your personal representative will need, such as bank account numbers, insurance policies, instructions for your home and/or pet, your funeral wishes, and more. It is crucial in helping your family carry out your plans by giving them access to the personal information they will need. Gifts and Memories List: A gifts and memories list is a place to pass on specific pieces of personal property to certain people. We encourage you to use this when you want to pass on family heirlooms and meaningful possessions, as it is best not to name small, specific items in your will.

(Related: 7 End-of-Life Documents You Need to Create)

Communicating with Key People

Communicating with the people who will carry out your plan when it is necessary is also a large part of estate planning.  Your personal representative, your medical agent, your financial agent, and your family should know and understand your plans and what they need to do should you become incapacitated or die. They should also know where you store the documents that make up your estate plan for when they need to implement them.

Maintaining Your Estate Plan

Once you’ve created your estate plan, you review and update it at least once a year. Estate laws, your life circumstances, your relationships, and your end-of-life goals all may change. This is why it is important to review your instructions in each of these documents to ensure they will do what you need them to when the time comes. We encourage people to think of estate planning as an ongoing process, not an event. Your estate plan in your 30s will look different than your estate plan in your 80s. And it should. An effective estate plan changes as you and your life change. We recommend you find an estate attorney you trust who can help you set up a solid estate plan and will guide you in tweaking and revising it as the years pass.

We’d Love to Help You With What Your Estate Plan Should Include

Effective estate planning includes creating legal documents, creating non-legal documents, communicating with key people, and ongoing maintenance. If you’ve been wondering what estate planning includes, and you know you need to create your own estate plan, schedule an appointment with us today.  We’d love to help you get started.

Joshua E. Hummer, Esq. is the founder of Relational Estate and Elder Law, and he has been a practicing attorney for over 15 years. While experienced in many parts of the law, Josh specializes in estate planning, estate administration, and elder law. He is licensed in both Virginia and West Virginia. Josh’s passion lies in helping people gain peace of mind about the future through holistic legal planning. When he isn’t meeting with clients or crafting legal documents, Josh enjoys spending time with his lovely wife, Jill, and their four vibrant children.