There are many different types of estate planning tools. The ones you use would depend on your own personal goals.
However, there are some similarities between strategies. This article looks briefly at some of the most common elements of an estate plan.
Wills
Your will is likely to be the core of your estate plan. This document typically outlines three of the most important aspects of your estate:
- Who handles property distribution
- Who gets your property
- How to divide your property
This is part of a formal process. To enact your will via this process, people must first know that your will exists and where to it.
Trusts
Trusts were traditionally a special-case tool, but they are becoming steadily more common. When deciding on whether you need a trust, one of the primary concerns is typically the cost-benefit ratio. They could offer more control and certain unique advantages, but they also typically require some upkeep and up-front expense.
Advance directives
Wills communicate your wishes after your death. Advance directives do so when you are still alive but cannot make your own decisions.
These instruments, as a general category, typically outline responsibilities and desires for end-of-life care. They might also give people power and responsibility to act on your behalf if you start to suffer from mental incapacity.
Long-term care plans
The USA has the most healthcare expenditure on the planet per capita, at nearly double the second-place country. At least part of this statistic comes from the staggering cost of long-term care. Protecting your assets from this expense could become part of your overall strategy.
The general purpose of an estate plan is to leave a legacy. Exactly how you go about doing that would depend on your own goals.