Estate planning

Estate planning is the process of anticipating and arranging, during a person's life, for the management and disposal of that person's estate during the person's life, in the event the person becomes incapacitated and after death. The planning includes the bequest of assets to heirs and the settlement of estate taxes. Most estate plans are set up with the help of an attorney experienced in estate law.

Overview

Estate planning involves the will, trusts, beneficiary designations, powers of appointment, property ownership (joint tenancy with rights of survivorship, tenancy in common, tenancy by the entirety), gift, and powers of attorney, specifically the durable financial power of attorney and the durable medical power of attorney.

Importance of Estate Planning

Estate planning is important as it can significantly impact the wealth you leave to your loved ones. Without a plan in place, your estate may be subject to high estate taxes, leaving less for your heirs. A proper estate plan can eliminate the uncertainty over estate taxes and maximize the value of the estate by reducing taxes and other expenses.

Components of Estate Planning

Will

A Will is a legal document that sets forth your wishes regarding the distribution of your property and the care of any minor children.

Trusts

A Trust is a legal arrangement through which one person (or an institution, such as a bank or law firm), called a "trustee," holds legal title to property for another person, called a "beneficiary."

Powers of Attorney

A Power of Attorney is a legal document giving one person (the agent or attorney-in-fact) the power to act for another person (the principal).

See Also

• Will
• Trust
• Power of Attorney

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Estate planning

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