Most adults, especially high net worth individuals, have a variety of holdings, whether those come in stocks, bonds or real estate. Estate planning, therefore, is necessitated in the case that the individual dies or is incapacitated.
These plans are generally set up with the help of an estate law attorney and includes the creation of a will, setting up trusts in the name of specified beneficiaries as a means to limit estate taxes and establishing a guardian for living dependents. They also should name an executor of the will, set up power of attorney to direct other assets and include funeral arrangements.
While an estate plan is binding, it should also be modified throughout the individual’s life. As financial or familial situations change, so too should the estate plan. Failure to properly establish an estate plan will mean the decisions regarding the individual’s holdings will be left up to immediate family members, which is not only a burden but may also mean his or her estate is not distributed in a way that he or she would have wished.
In addition, estate taxes can be high, and a lack of financial planning may leave the family of the deceased or incapacitated to see their inheritance reduced.
Those who are setting up their estate plans should work closely with their attorney to ensure they understand all options involved and can therefore make an informed decision regarding the future of their estate as well as that of their immediate families. Though their wishes will be fulfilled according to their estate plan, they should also talk with those who stand to inherit money to make it clear what their expectations should be.