Have you ever made an estate plan? If not, then you should know that estate planning is the anticipatory process of arranging your assets and finances for distribution after your passing. In other words, you know one day you’re going to die and you want your family and loved ones to benefit from the estate you leave behind.
Estate planning isn’t as simple as making a list of what everyone will inherit. You’ll have to include crucial details that will help with the distribution process. Likewise, you’ll have the chance to name an agent that can benefit you while you’re still alive. Here’s what’s included in your estate plan:
A last will and testament
A will is the most basic legal document in your estate plan. Your will includes who’s designated to inherit from your estate. You may also have your funeral arrangements detailed in this important document.
The executor of the estate
Within your will, you can name an executor of the estate. An executor will help protect your assets and distribute assets after the probate process. Probate is the process in which the estate plan is validated, which gives the executor plenty of time to submit your death certificate and collect benefits.
Probate can take up to several years and your estate may be taxed. As such, if you don’t want this to happen and want to ensure your heirs inherit everything you wish for them, then you may make a trust. A trust is a legal document, much like a will, but has more benefits for your heirs in regards to estate taxes and probate.
Powers of attorney
Finally, you may designate an agent to make decisions on your behalf in your will, this is called a power of attorney. A power of attorney, typically, makes medical and financial decisions in your stead if you’re incapacitated. You can designate one person to be your power of attorney for both, or create separate powers of attorney for each.
An estate plan is complicated, which is why many people seek out legal help. In many cases, people who pass away and don’t seek legal help to create their estate plan end up causing their family and loved ones issues.