An estate plan is more extensive than a will. A will states what you want to be done with your belongings. An estate plan provides details about your care, assets, and wishes. It is much more comprehensive than a will and will help ensure everything in your life is adequately cared for.
Create a Professional Team
First, you need to put together a professional team to help you with your estate plan. You are going to want to hire an estate planning attorney to draft all the legal documents.
You are also going to want to work with a tax professional to plan for the tax implications to your life and the lives of your loved ones that your estate plan will have. Then, you will want to hire a financial advisor to help you think through the financial implications of your plans.
Take Care of Dependents
If you have a dependent right now, such as a minor child or a special needs individual you are the legal guardian of, you will want to arrange for their care. You are going to want to appoint a legal guardian for each of your dependents.
You may also want to include a back-up legal guardian if the first cannot take on the duty. Remember, you should get their consent before including them in your plans. Also, keep in mind you can have someone else manage the money you leave for your dependents; the guardian is the person who will take care of the dependents.
Consider Trusts
As you work on your estate plan, instead of just leaving items or money to your heirs in your will, consider setting up a trust. With a trust, you can determine what goes into the trust and how it is distributed over time.
A trust requires a skilled attorney to set-up but can be a great way to ensure your heirs are supported how you intended. For example, with a trust, you could distribute money for set expenses, such as college tuition or a house down payment, or you could allocate a certain amount of money to your heirs each year.
Work to Avoid Probate
When you die, if your estate isn't set-up properly, it will have to go through probate, which is a costly legal process that makes your assets a matter of public record. Work with your attorney to create a process so that your assets can avoid the probate process and instead go directly to your heirs without any hassle.
Plan for Long-Term Care Needs
With a good estate plan, you will be able to plan for long-term care needs. Long-term care is expensive, and proper planning can help you avoid having to give up all your assets to get long-term care in your later years.
Prepare for Health and Lifestyle Needs
Finally, with a good estate plan, you can take care of your health and lifestyle needs as you age.
You can set up a healthcare power of attorney so that it is well established who you want to make healthcare decisions for you if you cannot. Make sure this person knows they are your healthcare power of attorney and knows what your wishes are.
You can also determine who exactly can have HIPPA access to your healthcare information if you want more family and friends to access that information outside of your power of attorney.
You can also set-up someone with the financial power of attorney to make the financial decision if you cannot.
It is time to act and create an estate plan. Start by assembling a team of professionals to help you craft your estate plan, and then create a comprehensive plan that ensures your dependents and you are taken care of if you are unable to do so. Work to create a plan to share your assets with your heirs without needing to go through probate and incurring unreasonable taxes. Your estate plan is something you should review and adapt over time.
