While some people may believe that drafting a trust or will constitutes effective estate planning, there are several other factors to consider if one wishes to ensure that all of their assets are transferred to the heirs they choose without any complications. Most experts recommend that every estate plan includes a will or trust, beneficiary designations, a letter of intent, a power or attorney and healthcare power of attorney and guardianship designations.

Wills and trusts ensure that property and assets are passed on in accordance with one's preferences when they die. They can also help prevent legal challenges that might change how these assets and property are distributed. Beneficiary designations allow one to distribute possessions and funds that are not covered by a will, such as a 401k plan. All beneficiaries must be over the age of 21 and mentally competent. If they are not, courts could become involved.

A letter of intent allows one to specify what should be done with a particular possession or can provide other special requests, such as funeral arrangements. While not a legally binding documents, most courts try to respect requests made by a letter of intent.

A power of attorney allows a representative to act on one's behalf in the event that one becomes severely disabled. Without such a document, a court can decide how one's belongings should be passed on. Of course, it is important to choose someone trustworthy to designate as one's representative. Similarly, a healthcare power of attorney designates a person who becomes responsible for making healthcare decisions in the event one becomes incapacitated. For instance, if one wishes to be taken off life support in the event of a coma, they should designate a representative who is likely to comply with this request.

Guardianship designations stipulate who should become the legal guardian of children under 18 after the person dies. If one does not incorporate guardianship designations into their will, the court could place the deceased's children under the care of a relative of which the deceased person would not approve. In rare cases, the state might even take control of the child's care completely.

Source: San Francisco Chronicle "6 Estate Planning Must-Haves" Glenn Curtis, May 31, 2011