Estate planning is an important process for everyone, regardless of age or wealth. It involves creating a plan for how your assets will be managed and distributed in the event of death or disability. There are six essential components to an estate plan, each of which can help ensure that your wishes are carried out and that your loved ones are taken care of. The first and most well-known component of an estate plan is a will.
A will is a legal document that outlines how you want your assets to be distributed after you pass away. It also allows you to designate who will take care of any minor children or pets in your care. A will is a public document after it is filed with the court, so it is important to make sure that it accurately reflects your wishes. Another important component of an estate plan is a trust.
A trust is a legal agreement in which a trustee holds the assets of a grantor for the benefit of a beneficiary. This can be useful for estate planning because it can help keep your assets out of probate, which can be a time-consuming and costly process. A trust can also set detailed rules for when and how beneficiaries receive their inheritance. Unlike a will, a trust does not become public record after it is created, so it can provide more privacy for your estate.
A comprehensive estate plan should also include documents that outline your wishes for medical care if you become incapacitated. This includes documents such as a living will, health care representative, and advance health care directives. These documents allow you to specify what type of medical treatment you would want if you are unable to make or communicate decisions. In addition to these documents, you may also need one or more trusts in your estate plan.
Trusts can be used to reduce taxes on certain assets or to provide more control over how assets are distributed after death. You may also want to consider designating beneficiaries on retirement accounts and insurance policies, as these assets generally do not become part of your estate or trust and go directly to the beneficiary. Finally, it is important to inventory all of the assets that you own, from cars to collectibles. This will help ensure that all of your assets are accounted for in your estate plan.
It is also important to consider whether you have adequate life insurance to provide for your family after you pass away. Having helped people in Edmond and the surrounding regions for over 30 years, our team is experienced in all types of financial and investment planning, including estate planning. We understand the importance of having an up-to-date estate plan that reflects your wishes and provides for your loved ones. If you need assistance creating an estate plan, please contact us today.