When someone passes away, their property must somehow pass to another person. With just a few exceptions, most people have the right to dictate to whom, the amount and the manner in which others are to receive their property.
The documents that “control” the disposition of property are part of your “estate plan.” They are also known as “testamentary documents” such as a Last Will & Testament or a Living Trust. They are prepared to coordinate what would happen with your home, your investments, your business, your life insurance, your employee benefits (such as 401K plan) and other property upon your passing.
The remaining “estate planning documents” are used to carry out your wishes regarding health care and financial matters, so that if you ever are unable to give directions yourself, someone you know and trust can do that for you. These documents are also known as “advanced directives” and include a Designation of Healthcare Surrogate, Living Will, Power of Attorney and Designation of Pre-Need Guardian.
In summary, the estate plan is the plan a person makes for the management of their finances and healthcare in the event they become incapacitated, and the plan to administer there “assets” after death.
