5 Types of Estate Plans

An estate plan can reduce estate tax, protect minors, and help avoid legal disputes. It also permits you to arrange for the distribution of your property after death. A wealth planner can help you determine which trust might be right for you. Here are five types of estate plans: 

Living Trust 

Real estate holdings can be transferred into a living trust. When establishing this trust, include details about investment account transfers and who the trust’s administrator will be. The trust document should also include vacation property details and trust amendment procedures. Set trust funding instructions and specify which assets to exclude from the trust. A living trust also allows you to specify how to terminate it and distribute property to beneficiaries. Talk to a wealth planner about tax planning, asset distribution, and dispute resolution processes when organizing your living trust. 

Power of Attorney 

A power of attorney is the delegation of financial decision-making to another party. The party will have specified real estate powers and can make investment decisions. It also enables another party to make healthcare decisions on your behalf and pay your bills. They can file your taxes and manage your businesses. 

Designating someone as your power of attorney allows them to sign documents on your behalf and make transactions from your bank accounts. They can also manage your retirement account, access safety deposit boxes, and offer gifts from your assets. Many people select a power of attorney as they approach or enter into end-of-life care to make the distribution of assets easier and remove the burden of making financial decisions. 

Living Will 

A living will includes your pain management wishes and preferred medical processes. If you have any life support preferences, such as resuscitation details, ventilation support, blood transfusion, and palliative care, you may state them here. Living wills may also provide details about organ donations, treatment restrictions, or dietary needs. If you wish to participate in experimental treatment, also include that information in the document. Some also choose to include hospice care and dialysis treatment in their living will.

Last Will and Testament 

The last will and testament allows you to state what happens to your assets and who will serve as guardians for your children after your death. Details about preferred funeral arrangements, including burial and cremation, are typically included.  

The last will and testament also lists alternate estate executors. It includes a letter of instruction and provides information about your insurance policies. If you have pets, you can arrange for their care in your will. Other things to include in the last will and testament are vital documents, financial accounts, and digital asset accounts.

Charitable Trust 

A charitable trust includes a list of all the charities you want to support financially. Include guidelines for the distribution amount and schedule for each charity. Define charitable purposes and include information about how to calculate the donated amounts.

Working with a Wealth Planner 

A wealth planner helps you design a trust that includes detailed instructions for asset management and distribution. This helps maintain the privacy of your assets and provides clear instructions about inheritance. A wealth planner can also help you evaluate your assets, navigate tax requirements, and manage your investments. Contact a financial planner today to choose the right estate plan for you.