There can be confusion on the definition and need for an estate plan.
We will all have estates someday, so it may be helpful to know what a plan actually does. While estate planning can be complicated to the layman, there are some basics that make it less confusing, according to the Vail Daily in “Estate Planning.”
If an estate is the property you have when you pass away, then estate planning is deciding what should happen to that property. It is you deciding beforehand who you want to have your property and the legal means by which they will receive it.
The two most common methods to have your property distributed are wills and trusts.
A will is a legal document that is submitted to a court. The will sets out who should receive what. If the will is valid, the court will oversee the process of making sure that the property goes where you want it to.
A trust creates a new legal entity to hold and distribute property. It is not normally submitted to a court, unless it is a “testamentary” trust created under a will to manage the estate distribution. Another person, known as a trustee, is charged with making sure that your directions are followed.
There are other aspects of estate planning that you should address, including planning for your own end-of-life care.
An estate planning attorney can guide you in creating an estate plan that fits your circumstances.
Reference: Vail Daily (Dec. 8, 2016) “Estate Planning.”