Estate planning is the process of making decisions about what will happen to your assets and property after you die or become incapacitated. It can help to ensure that your wishes are carried out, and can also minimize taxes and avoid probate. If you're new to estate planning, here's a beginner's guide:
Make a list of your assets. Your assets may include financial assets such as bank accounts, stocks, and real estate, as well as personal property such as jewelry, art, and collectibles.
Determine your goals. Estate planning is not just about distributing your assets after your death. It can also include making decisions about healthcare, such as end-of-life care and the use of life-sustaining measures. Consider what your goals are for your estate plan and what you want to achieve.
Choose an estate planning attorney. An estate planning attorney can help you to understand your options and create a plan that meets your needs and goals. Look for an attorney who is experienced in estate planning and who you feel comfortable working with.
Create a will. A will is a legal document that outlines how you want your assets to be distributed after your death. It can also name guardians for minor children and appoint an executor to manage the distribution of your assets.
Consider using trusts. A trust is a legal arrangement in which a trustee holds assets on behalf of a beneficiary. There are several types of trusts that can be used for estate planning, including living trusts, testamentary trusts, and irrevocable trusts. Trusts can be a useful tool for managing assets and minimizing taxes.
Appoint a power of attorney. A power of attorney is a legal document that allows you to appoint someone to make decisions on your behalf if you become incapacitated. There are different types of powers of attorney, including durable power of attorney, medical power of attorney, and financial power of attorney.
Review and update your estate plan regularly. Estate planning is an ongoing process. It's important to review and update your estate plan regularly, as your circumstances and laws may change over time.
(Source: "Estate Planning Basics," Consumer Financial Protection Bureau, https://www.consumerfinance.gov/consumer-tools/estate-planning-basics/)
(Source: "Estate Planning: Wills, Trusts, and More," Federal Trade Commission, https://www.consumer.ftc.gov/articles/0271-estate-planning-wills-trusts-and-more)