Preparing Your Estate Plan

All our lives, we are focused on trying to make a living and taking care of ourselves and our family. That is why people work hard in order to provide well for their family. Along the way, people find success and the wise are able to accumulate assets and properties that ensure their financial stability. But as people age and with properties in their possession, they begin to think of other things. With an impending retirement and beyond, one may begin to ask, "Who will take care of my family when I'm gone?". Such a question is what proper estate planning will try to address.

Estate planning aims to efficiently try to dispose or make effective use of accumulated assets and properties in such a way that the greatest amount of estate passes through the estate owner's chosen beneficiaries. Along the way, estate planning also will try to keep the associated taxes down to a minimum and keeping the probate court out of the way as much as possible in trying to deal with the estate properties.

In order to preserve the asset and property values especially when the owner is getting older, estate planning is essential. It can ensure that the right people, usually the estate owner's beneficiaries, benefits from what he or she leaves behind. Estate planning makes use of a number of tools in order to achieve this. One of them is the creation of a will.

Wills are considered as the most basic of the estate planning tools being used to preserve the estate owner's interests. Wills usually contain basic instructions that tells the lawyer or the court just how a deceased estate owner would want to distribute his or her properties and assets. The creation of a valid and legal will is important especially for people who are concerned on how their properties should be divided in the event of their death. Wills help prevent property squabbles especially among the beneficiaries knowing that a legally binding document made by the estate owner exists that instructs the division or disposition of the properties.

A trust is another estate planning tool available for people to make use of. A trust is simply a legal arrangement where a fund or a property is being managed by one party for the benefit of another. An estate owner may entrust a part or all of his or her property to a chosen group of people (also called as trustees). The trustees become the legal owners of the estate but are obliged to hold the property for the benefit of one or more individuals (the beneficiaries) chosen by the actual owner. Trusts can be created while the estate owner is still alive or it can also be created after death by incorporating its creation as part of a will.

Another estate planning tool is the power of attorney. This document grants an estate owner's legal representative or individual the power to make certain decisions on behalf of the person providing that power (the principal). The power may be entrusted to any person and not necessarily to an attorney-at-law. This document authorizes the holder with the power to make decisions according to the principal's wishes or instructions. This may be issued prior, on or after the principal's demise. The durable power of attorney can be used in cases where the principal may still be living but may require someone to do the decisions for them. This is especially important for estate owner's who may be suffering form dementia or senility and may not be competent enough to make the decisions on certain matters themselves.