An estate plan is a set of instructions made by you, the testator, to help direct how your assets are handled after your passing. It may be a morbid subject to talk about, but making plans early can help the people close to you who are still alive. Without these instructions, your loved ones may not know what your final intent was for your estate.
Is this your first time creating an estate plan? Here’s where you can start:
Creating a will
The most basic document of an estate plan is the will. Your will instructs who should inherit from your estate. You could, for example, state that your spouse should inherit your home, your oldest child would get your car and your youngest would get a family heirloom. There’s no exact way to disperse your estate and many people make plans around what they think can help their loved ones the most in the long run.
Naming an executor of the estate
After you pass away, someone will need to be responsible for the distribution of your estate. You can name an executor of the estate who would need to validate and file your will, itemize assets, collect death certificates, contact heirs and pay any taxes and debts. It’s a very important role that often requires a high level of trust and confidence in a person’s skill and timeliness.
Establishing a trust
A will can only do so much for some people. It doesn’t, for example, protect an estate from taxes and disputes. One way people can avoid this issue is by establishing a trust. You can give assets to a testator to hold onto until instructed. Then, assets given to a testator are dispersed to heirs, charities or even pets.
There’s a lot more an estate plan can do for you. You may need to reach out for legal help to understand all of your options.