Estate planning is often neglected as a strategy to protect a person’s financial well-being while they are young and in good health. A recent survey shows that only 40% of American adults have an estate plan in place.

However, comprehensive estate management is crucial long before a person’s life comes to an end. Protecting yourself and your family’s financial future is vital in case you become physically or mentally unable to take care of your own affairs.

Basic estate planning strategies

Depending upon a person’s net worth, there are two different focuses for estate planning:

Will-focused: For families whose current financial situation does not warrant a revocable living trust, the basic plan includes:

  • Advance medical directive
  • Last will and testament
  • Living will
  • Financial power of attorney

Trust-focused: For high-asset individuals who need a more sophisticated plan to protect assets, they should consider these five critical documents:

  • Revocable living trust
  • Financial power of attorney
  • Pour-over will
  • Living will
  • Advance medical directive

What is the difference between a pour-over will and a last will and testament?

For a will-focused estate plan, the last will and testament includes precise instructions on how you want your property distributed when you die. It also designates a guardian for any minor children you may have.

In a trust-focused plan, a pour-over will is only used as a safety net for assets that were left out of your trust before death and places those items into the trust. It contains minimal instructions since the revocable trust is your main estate document.

Protect your family’s wealth with comprehensive estate planning

The goal of estate planning is to protect you and your family from taxes, disputes and litigation while allowing you to distribute your assets as you see fit. But each person’s needs are different, and an experienced estate planning attorney can help you devise a plan that fits your situation and provides peace of mind.