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What Is An Estate Plan



An estate plan is a planning tool that makes arrangements for the management of a person's estate property during his lifetime and distribution of that property after his death. The management and disposition of estate assets can be achieved through vehicles like wills, trusts, lifetime gifts, insurance, a combination of the above or other devices. An estate plan can also be a form of preparation to leave estate property to family members so as to reduce the federal and state estate tax burdens.

Estate plan checklist

The process of setting up an estate plan is not overly difficult, complicated or expensive. Still, most Americans lack even a simple will. In an effort to break down the process into manageable components, here is a checklist of steps to perform to prepare the beginnings of an estate plan:

  1. Prepare a will. A simple will suffices. You need a written, witnessed, signed document that says how you want to dispose of and distribute your assets. Otherwise, state laws of intestacy will take over and govern the decision-making that you did not do. The probate process will be more tedious than necessary. Get the will notarized if required and have the will signed by the required number of disinterested witnesses who do not receive anything under the will.
  2. Compile key documents. In addition to a will, prepare, or have an attorney prepare for you, a durable power of attorney and a health care proxy, at a minimum. These are basic, simple forms. Anyone over 21 years old with estate triggers like a bank account, car, home, insurance policy, children or a retirement account should have a will and these documents.
  3. Review estate plan software or forms as a starting point. Even if you are not comfortable in a total do-it-yourself environment preparing important legal documents without assistance of counsel, you might prepare drafts to use as starting points with counsel. Counsel can review what you have prepared or just use the forms as a launching point. Draft forms will serve as an important exercise to force you to compile key information and documents. Drafts may trigger pertinent questions and also may save you billable hour time in meeting with counsel.
  4. Review the plan regularly. In instances of divorce, adoption, remarriage, spouse's death, birth, moving, inheritance and similar life events, you should revisit your plan. Laws change frequently.
  5. Name an executor. This person is tasked with management of your estate.
  6. Name a guardian for minor children. This is a big responsibility, so make sure the person is capable, available and willing.