Estate Planning

Understanding Estate Planning

What happens to your financial assets and liabilities (your estate) when you pass away? Who receives what, and when? If you do not address these questions, state law will determine the answers, which may not reflect your preferences. Planning for these matters is commonly referred to as estate planning.

Estate planning can range from simple written instructions to more formal legal documents prepared by an attorney. It is generally advisable to work with an experienced estate planning attorney, who can help you understand available options, explain potential implications, and draft documents that reflect your wishes in legally appropriate language.

Five documents that are commonly included in a basic estate plan are:

• Will – Specifies how your estate will be managed and who will serve as guardian for your children, if applicable.
• Revocable Trust – Establishes a legal entity to hold assets and describes how they will be managed and distributed. Because it is revocable, you can make changes during your lifetime.
• Living Will / Medical Directive – States your preferences for medical treatment if you are terminally ill or on life support.
• Health Care Power of Attorney – Identifies the person authorized to make health care decisions if you are unable.
• Financial Power of Attorney – Identifies the person authorized to make financial and legal decisions on your behalf if you are unable.

Copies of these documents should be kept in a secure but accessible location, and it is helpful to discuss your wishes with the individuals you designate, so they understand your intentions. Because laws and circumstances vary, consulting a qualified attorney is important to ensure your estate plan reflects your personal situation.

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