You can use an estate plan to anticipate your passing and plan how your remaining assets are handled — but a lot of people don’t have them in place. If you’re starting to think about your own mortality and how you want the future to play out, you may be a step ahead of your peers.
There is a lot you can do with an estate plan, but only if you get started. Here are three tips for success:
Add the most important document
The main document to focus on when making an estate plan is your will. A will describes how you wish for your assets and properties to be handled after you pass away. Many people create a will to distribute assets — especially personal mementos — to family and friends. You can name anyone as a beneficiary.
You can also name an executor of the estate in your will. The executor’s role is to settle the estate. Their main priority typically is to make sure that your final debts are settled and to distribute the remaining assets to your beneficiaries. Having someone close and responsible as your executor can help ensure your assets are safely handled.
If you have a child, you can also name a guardian in your will. A guardian can care for your child in your stead until they become an adult.
Protect your assets
While a will helps instruct how your assets are managed, it is not the only document. You can create a trust to distribute assets, too.
Why consider a trust when you have a will? A will can face estate taxes, probate and disputes, which can make it harder for beneficiaries to inherit assets. You can use a trust to protect your assets during and after your life. You can also use specific kinds of trusts to make unique bequests, such as donating remaining assets to charities after your death. Trusts bypass the probate process, which makes them more secure.
Plan for your future care
If you experience a medical condition or injury and can no longer have the capability to care for yourself, a power of attorney can come to your rescue. A power of attorney allows you to designate a representative or agent who can manage your financial and health care decisions on your behalf when you’re not capable of doing so yourself.
Legal guidance is available to discuss your estate planning options — and help you put together the plan that works best for you.