At the risk of sounding trite, we’d just like to comment that estate planning is something everybody should do at some point. We can say this because it doesn’t take a special type of person to qualify for estate planning. This is an important process that can be adapted to everybody’s needs.
So, what is involved in estate planning? The answer depends on who is asking. The process will be different for young people just moving out of their parents’ home and older folks looking at retiring soon.
One important aspect of estate planning is establishing a last will and testament. This document, of course, formalizes your wishes about where your assets will go when you died. Other matters can be addressed in one’s will as well. Failure to set up a will–if one’s assets are not otherwise disposed of–means that one’s assets will be distributed according to state law, which is kind of a one-size-fits-all approach and not at all satisfactory for many people.
Along with drafting a will and all that entails, one will need to pick an executor to be in charge of managing your assets during the process of estate administration. One should select this person carefully.
Two other documents that are good to include in this process are a power of attorney and a living will or advance health care directive. A power of attorney involves selecting a trusted individual to make financial decisions for you in the event you become incapacitated. An advance health care directive also involves establish a power of attorney, but for medical decision-making purposes. It also allows one to express medical preferences.
These are just some of the rudimentary aspects of estate planning. Much more can be done. Those interested in getting a plan going should work with an experienced attorney to ensure their plan addresses all their needs in the most efficient way possible.
Source: CNN Money, “10 steps to painless estate planning,” Martha White, March 3, 2014.