Your New Year to-do list may include getting an estate plan. The process of putting together the documents that make up this plan is often overlooked or postponed. As a result, if you find yourself pushing this item lower and lower on your list, you are not alone.
Like any big item, completion is easier if the process is broken down into more manageable components.
What are some manageable components of an estate plan? Breaking down the larger task of putting together an estate plan was recently discussed by the experts with Think Advisor, a group that is dedicated to providing information about investment and financial growth opportunities.
Three of the smaller components to the larger estate planning task that are most applicable from this piece include:
- Will. Likely the most commonly known portion of an estate plan, a will is a legal document that can be used to dictate the distribution of assets.
- Revocable trust. This legal tool can help reduce estate tax obligations, can provide protection from creditors and can help the creator to establish wealth through generations.
- Powers of attorney documents. There are two general categories for power of attorney documents. One involves the power over financial affairs, the other gives an individual the power to make healthcare decisions on your behalf. Both are important and can be given to different people. These powers can go into effect in the event of incapacitation. This could be triggered if involved in an automobile accident or if you suddenly become ill.
Although fairly basic, these three steps can help begin the estate planning process.
Should I seek legal counsel? Even these three fairly basic steps can be complicated. If not structured properly, the documents used to create the three tools discussed above can lead to unforeseen results.
As such, it is wise for those putting together an estate plan to seek legal counsel.