What is estate planning? Estate planning is the process of arranging legal matters, such as assets, in anticipation of a testator’s passing — but it’s a more complicated process than most people realize.
There are many things you can do with an estate plan. These include:
1. Name a child guardian
One of the things people overlook when making an estate plan is what would happen to their minor children if the testator suddenly passed away or became incapacitated. Who would care for the testator’s children until they are old enough to care for themselves? Naming a child guardian can help ensure that children are cared for by someone trusted. The child’s guardian would have many of the same rights and responsibilities as the testator.
2. Name a power of attorney
Another thing that people can include in their estate plans is a power of attorney. A power of attorney is an agent that acts in the best interests of a testator. Typically, a power of attorney only acts on behalf of an incapacitated testator to handle either their financial affairs or make medical decisions — or both.
3. Update it regularly
People often overlook the fact that estate plans can be outdated. Estate plans are often made with current matters in mind. In other words, people may grow their estate and need to include them in their plans. Or, a beneficiary could pass away, which could require estate plan alterations. People commonly update their estate plans every few years.
4. Consider trusts
A trust works a lot like a will. This legal document helps distribute assets to beneficiaries. However, a trust can be used to avoid probate and estate taxes. Furthermore, a trust can limit how beneficiaries use their assets, which could help ensure people go through college, for example.
5. Reach out for legal help
Estate planning is a complicated process. There are a lot of moving parts and one wrong move can create legal problems for your grieving loved ones. To make sure your estate plan is together, you may need to reach out for legal help.