Movies, TV shows and books mostly only discuss the distribution process of a will, leaving many people with the wrong impression of what estate planning is all about.
Estate planning involves so much more than designating beneficiaries to inherit your estate. Here’s what you should know:
Estate planning tool kit
A last will and testament make up a large part of estate planning, but you may also consider including the following:
- Trust: This legal document is much like a will, but it avoids the probate process and allows you to set parameters on how your assets are distributed. In other words, you may consider giving a family member portions of your assets each month or a larger sum of assets if your family goes to college. Trusts may be considered revocable or irrevocable.
- Power of attorney: This role, located in the will, decides who speaks on your behalf if you’re no longer capable to do so. You may designate a financial power of attorney – to handle your assets – or medical power of attorney – to handle decisions such as surgery or medication.
- Executor of an estate: The probate process can take months and someone may need to look over your estate after you pass away. A designated executor will protect your assets and upkeep maintenance.
- Child guardian: If you have a child to consider, you may need to designate a child guardian if none is available after you pass away.
- Letter of intent: A will and trust wouldn’t be clear if there wasn’t information explaining what it intends to do. You’ll have to write a letter of intent clarifying what your will and trust are supposed to be used for.
- Witness signatures: You may believe your will and trust are finished, but that doesn’t mean it’s valid. To validate your trust or will, you’ll need two eyewitness signatures who have nothing to do with the legal documents.
There are many smaller considerations you may also have to attend to as well. For example, in the digital age, many people have personal information and assets online. You may need to consider who has access to your phone and computer after you pass away.
All of this can seem overwhelming at first, but with a knowledgeable attorney, you may find estate planning much easier than it looks.