The Components and Importance of Estate Planning

The purpose of a will is to spell out the testator’s wishes regarding the care of their dependents and the distribution of their assets after their death. If an individual dies without a will, the state takes decisions about the estate in a process called probate. In the absence of a will, conflicts can arise between family members.

A will ensures less stress and fewer disputes for the testator’s beneficiaries. You use your will to nominate a guardian for your children or appoint an executor. A will can help reduce the amount of inheritance tax to be paid.

An estate owner creates a power of attorney to nominate the person(s) to step in and manage their finances in the event they become physically or mentally incapacitated. A testator can even authorize the nominee to appoint a person to serve as their guardian or conservator.

A trust is a legal entity separate from the estate owner. After an individual has created a trust, they should nominate a trustee for administering the trust property. A trustee is responsible for taking financial decisions on behalf of the testator in the event they become incapacitated. After the testator passes away, the trustee makes sure the assets held in the trust are distributed as directed by the trust creator.

A Revocable Trust avoids probate and helps reduce tax liability. If the testator becomes incapacitated, the trustee can use trust assets to pay bills on their behalf.

Trusts are complex vehicles. Hire an experienced estate planning attorney near you to set up your trust. Look for an attorney who knows the ins and outs of the law and can help you create a trust that accomplishes multiple goals.