Estate planning is the process of ensuring all your assets and funds get passed down to the right people after your death. Your estate involves everything in your possession, including homes, vehicles, investments, etc. Creating an estate plan means that you have total control over how your estate is passed on, which is why it can apply to anyone, no matter the worth of the estate.
When you go through the planning process, there are a few key people you need to know about — most whom you will name as important aspects of your plan. Here is who you can expect to include.
Beneficiaries
Beneficiaries are the people you choose to receive your property after you’ve passed. You can split the property up between different beneficiaries and specify who gets what. Be sure to keep this information up to date, as you don’t want property to go to someone you no longer favor. You are free to change who your beneficiaries are, and you can place limits on your property.
Guardians
If you are a parent with children who are minors, it is essential you name a guardian for them in the case of your passing. This not only gives you control over who will take care of your children, but it can avoid complex legal battles for your family. Consider creating a primary and secondary guardian in case something happens to your first choice.
Power of Attorney
The power of attorney is a person you name to take care of your affairs if you are no longer able to do so. If you become mentally incapacitated, the power of attorney can make important decisions regarding your finances, such as paying bills and managing your estate. You may also choose to have them make important medical choices for you, which you can discuss with them in advance. It is possible to split the responsibilities between several people. This way you don’t have all the power in one person’s hands.
Understanding how each role impacts your estate planning is important for making a successful transition after you pass away. Any asset that is left without a beneficiary or a decisive plan can end up in the hands of the government, in which case you don’t know where that asset will eventually go. Making the right plan early on keeps the decision making entirely up to you. Consider talking to a lawyer, like an estate planning lawyer in New York from Kaplan Law Practice, if you are confused about how to begin.
