Do you have a will to distribute your assets to loved ones after you pass away? Are you wondering whether you need more than a will to meet all your estate planning needs? While a will can be a valuable estate planning document, there are some limitations to what a will can do. In most cases, a will can provide direction as to which of your heirs should receive which assets. However, you can't use a will to put restrictions on how the heirs use the assets or to control the distribution of the assets. Also, a will is usually implemented after you pass away, which won't be much use if you're incapacitated and need asset protection during the final years of your life. Here are a few other estate planning documents you may need in addition to a will:
Power of attorney. It's very possible that you may need estate planning help before you pass away. You may find yourself with an end-of-life condition like Alzheimer's, which would impact your memory and critical thinking. Cognitive conditions could make it difficult or even impossible for you to manage your own finances. In this scenario, a power of attorney can be helpful.
A power of attorney designates a trusted friend or family member as your financial caretaker. That means they can pay your bills, make investment decisions, and even take out loans on your behalf. By designating a power of attorney, you can prevent others from taking advantage of your decreased mental condition.
Healthcare power of attorney. If you're incapacitated at the end of your life by a cognitive condition or some other health issue, it may be necessary for your doctors or family members to make tough medical decisions on your behalf. A healthcare power of attorney allows you to designate another person as your medical decision maker. If you've expressed your wishes to them, they can use that information to make choices that you would be happy with, such as whether doctors should keep you alive with the assistance of a breathing machine or whether you should live in an nursing facility.
Trust. It's possible that you not only want to direct who receives your assets, but how they receive them. You can do that with a trust. A trust can be used to place controls on asset distribution, such as tying distribution to an heir passing a certain age or achieving certain life goals. You can also designate a trustee to manage the assets and only distribute them as needed, which could be helpful if you have an heir who has difficulty managing money. A trust can be used for any number of asset distribution purposes.
For more information, talk to an estate planning attorney. They can help you determine which documents you need in addition to your will.