Many people think that estate planning only allows an individual to address the distribution of their assets when they die; however, that’s only one component of a comprehensive estate plan. Once you begin estate planning, you’ll also have to consider how your affairs and decisions on your behalf will be handled if you become incapacitated.
Once you get an estate plan written out, you should remember to review it at least every few years. You should also review your plan if you experience major life changes, such as getting married, going through a divorce, having children or experiencing significant changes in your finances.
Powers of attorney
You can name someone to make decisions if you can’t make those decisions for yourself. This person can be granted authority to exercise powers of attorney over specific areas of interest if you’re incapacitated, including financial and medical matters.
Wills
Your will should discuss what you want to happen to specific assets after you pass away. This is ideal for many assets, but you may need to consider trusts if you have higher-value assets or you need to enjoy the benefits of a trust.
You can include a guardian in your will. It may behoove you to name a primary and a secondary guardian who can raise your children if you pass away. The individual you name should share your views on raising children. Speaking to them ahead of time may be beneficial so they know your wishes.
Trusts
Trusts are a legal tool that can holds assets for you. The trustee who’s in charge of the trust retains control over the assets until they distribute them to your beneficiaries. You can institute guidelines for how and when your loved ones receive what you have left for them.
Working with a legal representative can help to minimize the chance of errors in your estate plan. Getting this done as soon as possible is wise, as no one truly knows what the future has in store.
