Many United Kingdom residents have likely failed to proactively address estate planning matters. The reasons for failing to draft a will or set up a trust are numerous. Some individuals simply don’t want to contemplate end of life matters, others may feel they are too young to have a will or that they don’t have enough assets to warrant drafting a will. The most common reason individuals avoid tackling estate planning, however, is that they simply don’t know where to begin.
The following are four essential estate planning documents that every individual, regardless of age or wealth, should consider. The most obvious being a will. A last will and testament is a legal document in which an individual essentially dictates what they want to happen to their assets and belongings upon his or her death. An individual with minor-age children can also use a will to appoint a legal guardian as well as an estate executor who will manage the administration of the estate.
Another key component to a comprehensive estate plan is a revocable trust. A revocable trust allows an individual to name assets to the trust and designate beneficiaries to such assets. Upon an individual’s death, these assets then pass directly to the named beneficiaries rather than going through the often lengthy and public probate process.
A health care directive or living will is another important component of an individual estate plan. With a health care directive, an individual can express their wishes and provide detailed instructions on medical interventions that should or should not be taken in the event they become incapacitated.
The final essential piece needed to complete a basic estate plan is the designation of a power of attorney. An individual named as power of attorney should be trustworthy and responsible. Among their duties, a power of attorney designates an attorney-in-fact who is tasked with the management of financial and legal affairs in the event an individual becomes incapacitated.
With the completion of these four basic documents, an individual is well on their way to having a comprehensive estate plan.
Source: The Bradenton Times, “Estate Planning: Basic Documents Every Adult Should Consider,” Bruce A. Bittles, Feb. 23
