Many people without an estate plan do not know what to include. After all, there are various strategies that individuals can use when planning what happens to their assets after they die.
AARP has a few estate planning documents they believe all families should have.
Power of attorney
You can have two different types of power of attorney: financial and medical. The financial power of attorney allows another person to control your financial accounts if you become incapacitated. This person can make investments, withdrawals and will know how you would want your assets or money spent.
With a medical power of attorney, this person makes medical decisions for you if you cannot do so for yourself. This should always be someone that you trust will honor your wishes and would know what you want.
Wills are the most common estate planning document. The will lays out your plans for how you want your assets distributed after death. In addition, your will may include who you choose as guardian for any minor children.
Revocable living trust
The revocable living trust allows you to stay in control of your finances and you can change your trust whenever you want. The point of the trust is to prepare for a time when you may not manage your own finances. The trust allows you to appoint someone to take over, if necessary. If you become incapacitated for any reason, your family does not have to go through the process of getting the paperwork to handle your accounts. Likewise, if you die, your assets pass easily to your beneficiaries.