What happens to your assets after you pass away? This question is often decided by your estate plan. An estate plan is a legal arrangement that allows you to decide how your assets are distributed after you pass away.
There are several important documents in an estate plan. Here is what you should know:
What is a will?
The most common legal document of an estate plan is the will. A will allows you to name beneficiaries. Beneficiaries can inherit assets from your estate. You can name a spouse, children, grandchildren, friends and colleagues as beneficiaries.
You can also use a will to name an executor of the estate. The executor is responsible for managing your assets after you pass away and distributing them to beneficiaries.
What is a trust?
If you want to protect your assets from disputes, estate taxes and debt collectors, you may want to consider drafting a trust. A trust allows you to put your assets in the name of a trustee. The trustee is responsible for managing your assets and distributing funds to your beneficiaries. There are different kinds of trusts that allow you to design when and how assets are distributed.
What is a power of attorney?
Your estate plan can include a power of attorney. A power of attorney can be responsible for your health if you become incapacitated. You can allow your power of attorney to control your medical care and financial matters on your behalf.
There is much more you can add to your estate plan. You can reach out to professional legal guidance to learn more about how an estate benefits you and your loved ones.
