Estate planning is a rewarding process that helps prepare your estate in anticipation of your passing. Most people have heard of making a will, but there are also many other tasks to do.
Here’s what you should consider when creating your estate plan:
1. Will
Your will is the most basic document of the estate plan. Your will is your last wishes for distribution of assets and names the person or people to administer the estate. In other words, you’re leaving behind instructions that provide for distribution of your estate (that is property you own) to beneficiaries.
2. Executor of the estate
When determining how your last wishes are executed, an executor of the estate will handle most of the matters. An executor is responsible for validating your will and filing it with a probate court. They may also be required to secure valuable assets, contact heirs, pay taxes and distribute assets during probate.
3. Power of attorney
As you make an estate plan, you should name a power of attorney. A power of attorney is a representative who acts on your behalf if you ever become incapacitated. This covers you during your lifetime as opposed to the other documents that take effect upon death. A Power of Attorney ends upon your death.
4. Child guardian
People may name a guardian who would be responsible for caring for their children if there’s ever a sudden death or emergency.
5. Trust
Some people aren’t comfortable with just a will and use Trusts for various purposes. People often make trusts alongside wills, which place assets in the trust of a trustee to hold for beneficiaries. These can bring several advantages, depending on the type of trust you use and how you set it up.
6. Beneficiary Designations
Beneficiary designations of accounts (or holding assets jointly with a right of survivorship) are often a major component in estate planning. It is very important to make sure that your estate planning documents and any beneficiary designations mesh. The beneficiary designations will control the assets covered by the beneficiary designation and aren’t changed by your Will and a change in your Will.
It’s important to understand just how complex an estate plan can be. You may need to reach out for legal help to learn about your options.
