Estate planning is the legal process of making your wishes known for after your passing. It is often believed to be something that is only for the rich or elderly, but that is not the case. Estate planning can benefit adults of all ages.
To get started, it can help to recognize some of the most important estate planning tools. Here are some important ones to consider.
The will
A will is the starting point of any estate plan. This document allows you to instruct how your assets should be divided upon your death. You can also name guardians to look after your minor children if you pass away before they become adults.
If you don’t have a will, then you risk your assets being divided according to state intestacy laws. These laws may not align with your wishes.
Trusts
Trusts also involve asset distribution, but they can be more varied and complex. For instance, you can set up a trust that releases a gradual income for your children over time. You can also use a trust for the sole purpose of paying for your child’s college education.
Powers of attorney (POA)
POAs are another essential aspect of estate planning. These instruments allow others to act on your behalf should you no longer be able to make decisions. For example, a health care POA can help ensure that your wishes regarding medical treatment and palliative care are honored. A financial POA can help ensure that financial decisions are still made in your best interests and according to your preferences.
These are just some useful estate planning tools. For more information on the subject, it may help to seek legal guidance.
