Estate Planning—Putting Measures in Place to Ensure the Orderly Distribution of Your Property
If you have built any kind of net worth, or if you own any property at all, you need an estate plan. When you die, decisions will have to be made about who now has right, title or interest in your assets. You can put measures in place that clearly state your wishes, with a will or a trust. If you fail to develop and implement an estate plan, though, your assets will generally be distributed under the provisions of state law.
The Estate Planning Process
The first step in the estate planning process is the gathering of information. An estate planning attorney will want to know as much as possible about your financial affairs, including real and personal property, financial accounts, retirement plans and business interests. This will include reasonable projections of what you expect to earn and accumulate in the future.
Your estate planning lawyer will also want you to specify how you wish your property to be distributed. Are there certain persons you want specifically excluded from your estate? Is there specific property that you want to go to a designated person?
Once your attorney has a good idea of what you have to pass on and where you want it to go, he or she will identify the different approaches you can take, including the execution of a will or the creation of a trust. Your attorney will take a number of factors into consideration, including tax consequences, upfront costs, and ease of transfer, when making a recommendation on a course of action.
After you have chosen the strategy you want to employ, your attorney will prepare all necessary documents, and will ensure that you take the appropriate steps to execute those documents. The tools typically comprising an effective estate plan include:
- A will or trust—the document that lays out how your property will be distributed
- A power of attorney—a document that gives another person the legal authority to act on your behalf
- A living will—a document that specifies what treatment you may or may not have in the event of a life threatening accident or illness
- An advance healthcare directive, or health care proxy—a document that grants another person the legal authority to make healthcare decisions on your behalf
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