Estate planning is important no matter how much money you have. Estate plans offer protection to you, your loved ones and your assets.

It is important to understand how estate planning works and what it can cover. It is also beneficial to work with an attorney to make sure your estate plan includes everything necessary to protect yourself and your loved ones.

There are several estate planning documents that are important, and it is helpful to understand what these documents are before meeting with an attorney.

A will provides instructions for asset distribution to your family and other beneficiaries once you die. Wills can also be customized to address different needs. You will need to appoint an executor or representative that will be in charge of distributing your assets. Wills cannot manage your assets if you become incapacitated, so it is important to understand the different documents that can help protect you.

A durable power of attorney is a legal document where another person acts on your behalf, called your agent or attorney-in-fact. The agent will be able to sell, invest and spend your assets. A durable power of attorney is used when you are incapacitated and unable to manage your own finances. This type of estate planning document is terminated once you pass away.

A health care power of attorney works like a durable power of attorney but instead authorizes someone to make medical decisions for you in the event you cannot make the decisions for yourself. This legal document can help families avoid conflicts by having someone speak on your behalf.

If you don't feel comfortable having someone making medical decisions for you, a living will may be a better option. Living wills state your intentions regarding life-sustaining medical measures if you are facing a terminal illness. This document lets medical staff know your wishes but does not appoint the right to speak for you.

There are several ways estate planning documents can protect you and your future. Understanding the different legal documents available will help you make the best decision for your financial and medical future.

Source: Northwest Herald, "Five most important estate planning documents," Feb. 8, 2012