Estate planning is not just about establishing who inherits from your estate. It also addresses how your assets are controlled after your death and any decisions that need to be made later in your lifetime. It is a complex set of legal documents that should not be overlooked or rushed.
When making plans for your estate, you’ll likely need to ask a lot of questions. It can be hard to find the right questions, but not impossible. Here’s what you may consider:
Who inherits from your estate?
The biggest question many people come to first is deciding who will be a beneficiary. You may have a spouse to whom you want to give your assets to live comfortably after you pass away. Or, you may want your children to live successful lives.
When deciding who will inherit from you, you may need to first figure out if you want to establish a will, trust or even both. Wills are essentially the cornerstone documents of estate planning. A will’s primary purpose is to distribute your property and assets according to your wishes to the beneficiaries of your choosing. Trusts have similar essential functions but allow for greater flexibility. For example, the creator of a trust can provide more specific terms for the transfer of their assets to their trustees, and assets may even be distributed during their lifetime rather than solely after death.
Who will overlook your estate?
Your estate won’t be left unattended after you die, but your family may not have full reign over how your estate is managed. Someone will need to distribute your assets and carry out your wishes as you intended. This role is often referred to as the personal representative, or executor, of the estate. This individual is tasked with filing your will with the court, paying taxes, overseeing payment of any outstanding debts and distributing your assets according to your wishes, among other responsibilities.
You are able to appoint a personal representative in your will. It is important to carefully consider who may be the best fit for this role. Are they trustworthy and will they be ready to act when you die? Under their watch, will your loved ones receive their assets in a timely and orderly manner?
Who will handle your financial and medical decisions?
Documents that plan for your future and critical decisions and also important to include in your estate plan. This might include an advance health care directive, to define any wishes for medical treatment, and a power of attorney, to designate an individual to manage your finances should you become incapacitated. Much like an executor, you may need to consider someone who is right for the job – and not just anyone.
Estate planning can be difficult and even overwhelming when you’re not sure how to move forward. Understanding your legal options can help to ensure your and your family’s future is in good hands.