The collection of preparation tasks that serve to manage an individual’s asset base in the event of their incapacitation or death, including the bequest of assets to heirs and the settlement of estate taxes. Most estate plans are set up with the help of an attorney experienced in estate law.
Major estate planning tasks include:
- Creating a last will and testament
- Creating a trust
- Creating a Codicil for minor will changes
- Limiting asset waste by establishing a trust account in the name of minor beneficiaries
- Establishing a guardianship for living dependents
- Naming an executor of the estate to oversee the terms of the will
- Creating/updating beneficiaries on plans such as life insurance, IRAs, and 401(k)s
- Setting up Durable Power of Attorney (POA) appointing an agent to direct other assets and investments and handle your affairs
- Setting up Medical Power of Attorney (MPOA) appointing an agent to make medical decisions for you in the event you are unable
- Appointing an agent to dispose of your remains after you pass
- Naming individuals authorized under your HIPAA release to speak to your medical care providers
Estate planning is an ongoing process and should be started upon reaching age 18. It should not wait until one has any measurable asset base.
As life progresses and goals shift, the estate plan should move to be in line with new goals. Lack of adequate estate planning can cause undue financial burdens to loved ones, so at the very least, a will should be set up even if the taxable estate is not large.