Estate planning is the process of organizing and managing your assets, including property, investments, and personal possessions, to ensure they are distributed according to your wishes after your death or incapacitation. Here are some lesser-known tips when planning your estate with an estate planning attorney.
Consider the use of trusts.
A trust is a legal arrangement in which one person, called the trustee, holds legal title to the property called the beneficiary. Trusts can be useful in various situations, such as avoiding probate, protecting assets from creditors, and providing for loved ones who may not be capable of managing their own finances.
Use powers of attorney.
It is a legal document that lets you appoint someone. It allows the appointed person to make decisions on your behalf if you are unable to. There are two types of powers of attorney: a durable power of attorney for financial matters, which allows your designated representative to handle your financial affairs, and a durable power of attorney for health care, which allows your representative to make medical decisions for you.
Create a living will.
A living will is a legal document that outlines your wishes for end-of-life medical care. It allows you to specify the types of medical treatments you wish to receive and those you do not want in situations where you cannot make decisions on your behalf.
Consider the use of life insurance.
Life insurance can be an important part of your estate plan, particularly if you have young children or other dependents who may need financial support in the event of your death. It can also be used to cover funeral expenses, pay off debts, or fund charitable giving.
Review your beneficiary designations.
Many financial accounts, such as 401(k)s and individual retirement accounts (IRAs), have beneficiary designations that allow you to specify who should receive the assets in the account upon your death. It is essential to periodically review these designations to ensure they are up to date and reflect your current wishes.
Update your estate plan as needed.
Your estate plan should not be a one-time event. As your life circumstances change, reviewing and updating your plan is vital to ensure it continues to meet your needs. This is particularly important after major life events, such as marriage, divorce, the birth of a child, or the death of a loved one.
Estate planning can seem overwhelming, but it is an important task that can provide peace of mind and protect your loved ones. Considering these lesser-known tips, you can create an estate plan that meets your specific needs and ensures that your assets are distributed according to your wishes.