This book explains estate planning in plain English, step by step, option by option. Once you know your choices, you can confidently move toward making an estate plan that fits your circumstances and wishes.
Plan Your Estate covers these estate planning goals:
Leaving property. If you are not wealthy, you might use a simple will or living trust, or both. You can also use co-ownership, transfer-on-death accounts, or beneficiary designations. If you have a large estate, you might also leave property to beneficiaries in more complicated ongoing trusts. No matter how you leave your property, it is better to have a plan—if you die without one, state law will decide who gets what.
Providing for young children. If you have young children, you’ll want to ensure that they will be well cared for if you die before they become adults. In your will, you can name guardians to raise them and managers to look after their inheritance. You’ll also likely want to buy life insurance to make sure that your kids have money after you’re gone.
Planning for incapacity. Part of estate planning is preparing for what would happen if you ever became unable to make medical and financial decisions for yourself. You can use a health care directive to name someone who will make medical decisions on your behalf and to express your wishes about end-of-life care. You can also prepare a durable power of attorney that gives a trusted person control of your finances. Preparing these documents can save your family much heartache.
Avoiding probate. Probate is a court-run process for wrapping up an estate. It’s often expensive and time-consuming, yet rarely provides any benefit to the beneficiaries. Thankfully, with a little planning, probate is fairly easy to avoid. Trusts, pay-on-death accounts, joint tenancy, and other probate avoidance methods can keep most or all of your estate out of probate, saving your loved ones time and money.
Reducing estate tax. Most people won’t owe federal estate tax. But if you expect to leave over $11 million (or $22 million as a married couple), you’ll probably want to use your estate plan to reduce the tax that your estate could owe after your death.