Tools for Estate Planning
While thinking about your death may be unpleasant, taking care of your family in its aftermath should be a priority. Without the proper estate documents, they may be subject to court appearances, fighting, and financial hardship. You can include many things in an estate plan, and having an idea about some of the common tools may help when it comes to creating one.
Creating a Will
The foundation of an estate plan is a will. This document goes through court after your death in a process known as probate. Without a will, your loved ones may have to wait longer to receive the property you leave behind. When you create a will, you need to name an executor. This person is responsible for following the instructions you set out in the document. This includes paying your outstanding debts, liquidating assets, and ensuring your heirs receive the personal items you indicated. A will should include instructions, such as:
- Who you want to inherit your assets as well as the amount
- Name those you want to get specific personal items
- Guardianship for minor children
Your will is not the place to indicate funeral arrangements since that is time-sensitive.
Starting a Trust
When you sit down to go over your options for an estate plan, a lawyer may suggest setting up a trust. This is a tool within which you deposit property to be held to benefit those you name. A trust serves a couple of purposes. First, it takes property and assets out of your name, something that may lower your tax liability while you are alive. Second, it directly passes the contents to the person or persons you name. Trust accounts bypass probate, allowing those you name to receive the contents quicker.
Executing Power of Attorney Documents
Estate planning is more than just taking care of your property after your death. A comprehensive plan should include documents that care for you when you need them most. End-of-life documents include something called a power of attorney. There are several different scenarios in which another person may have to make decisions for you. For example, a medical directive allows you to choose the person you want to direct your medical care when you can no longer do it. A financial power of attorney gives someone you trust access to take care of all your financial items when you are incapacitated, either mentally or physically. With the proper planning, you can ensure that things go smoothly for your family after you die. Consult with an estate planning lawyer to receive the best course of action for your situation.