When planning your estate, it is possible for you to refine exactly how you want your assets to be used during your life and after you’re gone. But, to speak metaphorically, if you want to finely tune the song of your estate, you have to understand the basic instruments.
A will is a foundational document that can clarify the distribution of assets and the estate planner’s end-of-life wishes. In the absence of a will, a probate court may end up distributing assets in a way that displeases family members, so it is better to draft a will and possibly re-draft it if your life situation changes.
Some people wonder exactly what is included in an estate. The answer is just about everything: life insurance, retirement accounts, real estate, businesses, savings accounts, cars, boats, inheritances and more. The task is to create a tally, determine the value of the assets and decide how they should be distributed. For example, setting up a trust might be the best way to distribute funds to family members over time, as well as protect the funds from creditors and estate taxes.
Another basic estate planning document is the power of attorney, which allows another person to handle financial matters for the estate owner. Powers of attorney can be written to the specifications of the estate owner, and an attorney can draft this document to the estate planner’s liking.
A couple of weeks ago, we discussed the importance of a health care proxy in a Texas estate plan. For more on that subject, go here.
Source: Fox Business, “How to Make Estate Planning Less Complex,” Casey Dowd, Aug. 22, 2013