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How to Create an Estate Plan

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What Is an Estate Plan?

An estate plan is a comprehensive strategy for managing and passing on assets, insurance, and health directives. Individuals, families, and couples who want to think ahead for the future will create an estate plan so that different pieces of their net wealth can be managed as part of a unified whole.

Is an Estate Plan Different from a Will?

A will is a document made when an individual is alive that specifies who should inherit any liquid assets or material objects upon their death. An estate plan will include a will. However, an estate plan is also likely to include a trust or multiple trusts that can take effect while the person is still alive.

How Can I Create an Estate Plan?

Creating the estate plan will mean tallying up all the different pieces of a person’s individual wealth, including property owned, stocks, holdings, cash, savings, insurance policies, and health issues. People with disabilities need to create specific estate plans to meet their needs.

Many people create a will to begin the process of creating an estate plan. Next, they consider any assets they want to leave in trust and establish a trust for those assets. Trusts are established by a grantor, who assigns trustees and beneficiaries, as well as guidelines for the trust, and then moves wealth and gifts into the trust.

An estate plan will need a power of attorney to be designated in case the owners of the estate are no longer able to manage their affairs. A set of health care instructions should be included in the estate plan as well. The person developing the estate plan will have to decide if they want the same individual or individuals managing their health care and financial matters, or if they would like to designate different parties.

Next, the person creating the estate plan will need to establish insurance policies, especially life insurance. Life insurance often covers the payment of debt or estate tax after the deceased passes away. Calculating potential taxes that the federal government could collect after death is a necessity in order to select the right policy that will cover all expenses, including funeral expenses. Insuring a business is a good idea as well.

Finally, your lawyer can advise you on how to store the documents of your estate plan so that they are safe and accessible to those who need them.

Do I Need a Lawyer?

Yes. Estate planning is a very complex process with many different pieces and parts, involving many different parties. It is important to have an estate lawyer to make sure everything is working together and established legally during the planning process.

Photo of page author Danielle Winterton

, LegalMatch Legal Writer

Last Modified: 06-12-2018 11:27 PM PDT

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