An estate plan is a set of instructions for how you want your assets distributed after your death. It includes the names of beneficiaries for all of your financial accounts and insurance policies, as well as any property or other assets that are not already in a trust. Your estate plan should also include instructions for what happens to any minor children in the event that both parents die before they reach adulthood.
An estate plan can help you avoid probate court by having some assets transferred directly to beneficiaries upon death; it may also reduce taxes on certain types of property by allowing them to pass directly through probate without being subject to taxation (for example, if there’s no will). An attorney can help ensure that everything is done correctly so there aren’t any surprises later down the line–and he or she may be able to suggest ways in which you could save money on legal fees while still getting everything done right!
Creating an Estate Plan
Creating an estate plan is a process that involves many steps. You’ll want to make sure you have all of the legal documents in place and that they reflect your wishes for how you would like your assets distributed upon death or incapacity. You will also want to consider who should be involved in this process and how they can help you create an effective estate plan.
In order for your wishes to be carried out as precisely as possible, it’s important that everyone involved understands exactly what their role is within the process of creating an estate plan. This includes:
- The executor or personal representative (PR), who is responsible for carrying out all of the provisions contained within any wills or trusts created by the deceased person;
- Lawyers who represent both sides of any disputes arising from these documents; and
- Family members who may inherit some portion of their loved one’s estate after their death–or even before!
Types of Estate Planning Documents
There are many types of legal documents that you can use to create an estate plan. The most common ones are:
- Will – A will is a document that states how you want your assets distributed after death, who will take care of your minor children and whom they should live with, and what kind of funeral arrangements should be made.
- Trust – A trust is a legal arrangement in which one person (the trustee) holds property for another person (the beneficiary). You may set up several different kinds of trusts depending on your circumstances and goals, including living trusts or irrevocable life insurance trusts (ILITs). These documents allow you to manage assets while still benefiting from their tax advantages during life while avoiding probate at death by transferring them outside of probate court jurisdiction through private contracts between trustees and beneficiaries rather than going through public record channels like wills do; these contracts also protect beneficiaries’ rights against creditors’ claims against the estate because they’re not filed publicly like other types do either!
Estate Planning Considerations
- Tax implications. An estate plan can help you avoid paying unnecessary taxes and reduce the amount of money your heirs will owe when they inherit your estate.
- Asset protection. An estate plan can help protect your assets from creditors, lawsuits and other claims against them.
- Guardianship of minor children. If you have minor children, an estate plan may include provisions that name a guardian for them if something happens to both parents before they reach adulthood (also known as “estate planning”).
- Business succession planning: If you own a business or have investments in one or more businesses, an estate plan should address how those businesses are passed on after death–or if they’re sold during life–to ensure smooth transitions between owners or managers without disrupting operations
Health Care Decisions
Planning for health care decisions is an important part of your estate plan. You may want to consider:
- Advance directives, which are legal documents that allow you to express your wishes for medical treatment in the event that you become unable to make decisions on your own. These include a living will and durable power of attorney for health care (also known as a “durable power of attorney”).
- Health care proxy, which names someone who will make medical decisions on your behalf if you cannot do so yourself.
Estate Planning for Pets
If you have a pet, it’s important to plan for their future as well. If you don’t, the responsibility of caring for your pets may fall on someone else. You can designate someone to take care of them in your will or trust. If no one is named, then local laws dictate who gets custody of them (usually family members).
If you want to make sure that your pet doesn’t end up in a shelter after you pass away, consider setting up an estate plan with provisions for them as well:
- Create a pet trust so that money from your estate can be used toward their care and maintenance while they are alive
- Name someone who will take over as guardian if something happens to both parents at once
Estate Planning for Digital Assets
The digital age has brought us many benefits, but it’s also created new challenges for estate planning. The most important thing to remember is that your digital assets should be included in your will–you might not think about them until after death, but they can be valuable and need protection just like other items in your estate.
If you have any kind of online presence (social media accounts, blogs or websites), then you should name someone who can manage those accounts after death. That person will have access to all of the information on these sites–including private messages between friends–so it’s important that they’re trustworthy and understand what kind of information should stay private during this process.
In addition to social media accounts, there are other types of digital assets that require special attention: email accounts; online storage systems such as Dropbox or Google Drive; cloud storage services like iCloud; photo sharing apps such as Instagram & Snapchat; video sharing platforms like YouTube & Vimeo…and more!
Choosing an Estate Planning Attorney
Choosing an estate planning attorney is a crucial step in the process of creating your estate plan. The attorney you choose should be someone who has experience and qualifications, as well as the ability to communicate effectively with you and your family members.
When choosing an estate planning attorney, consider:
- Qualifications: Does this lawyer have any special training or certification? For example, does he or she belong to the American Bar Association (ABA), which requires attorneys to complete continuing legal education courses every year? Or does he or she belong to another professional organization that promotes ethical behavior among lawyers? You may also want to ask what schools they attended and how long they’ve been practicing law.
- Experience: How long has this lawyer been practicing law? Has he or she worked on similar cases before yours? An experienced lawyer will likely know more about what steps need taken next than one who recently graduated from law school; however, newer attorneys might charge less because they haven’t yet established their own practices