What are the two phases of estate planning?

On Behalf of | Mar 21, 2020 | Estate Planning |

According to Kiplinger, 56% of Americans do not have an estate plan when they die. Procrastination born of morbid dread is the reason typically cited for this. However, maybe the reason that you have not yet started estate planning is that you do not know where to start. After all, estate planning can be complex and involve many documents. 

Estate planning may not seem so overwhelming if you break it up into two phases rather than looking at it as one enormous task. Legal documents related to estate planning can divide into two categories: the living side and the death side. 

Living side documents 

Documents on the living side are those that take effect while you are still living but only if you are no longer able to make decisions for yourself. They include a living will, which outlines the end-of-life care that you would and would not like to receive, and a medical power of attorney, which gives your chosen representative the authority to make decisions about your health care on your behalf. There are also living side documents not directly related to health care, such as a durable power of attorney for finances. Once you die, these documents also lose their effect. 

Death side documents 

These are the documents that detail what you want to happen to your estate after you die. The first death-side document that most people create is a will. Some people also choose to transfer assets to a trust for the benefit of loved ones or charities. However, it is often advisable to have a will in addition to a trust, especially if you have minor children so that you can name a guardian for them, something a trust cannot accomplish. 

FindLaw Network

RSS Feed