The most beneficial way to provide for your family after you pass away is to draft an enforceable estate plan. To create a successful strategy, it is helpful to begin preparing early. Your family can also save money and avoid unwanted stress if you have a legal arrangement in place.
Components of an estate plan
A good estate plan should cover all the bases. Typically this would include:
- Writing a will: Creating a last will and testament might be your first step. A will designates the distribution of your property according to your wishes. Without a will, your estate would default to the Texas laws of intestacy.
- Starting a trust: A trust might help you accomplish other goals such as avoiding probate, protecting assets, reducing estate taxes, or administering property for your heirs.
- Creating a power of attorney (POA): If you become mentally or physically incapacitated, it is important to have someone you trust appointed with power of attorney (POA). You can also create a healthcare POA. Whoever is designated will have the legal authority to make financial and health-related decisions on your behalf while you are incapacitated.
- Choosing beneficiaries: Selecting beneficiaries for a 401k or a life insurance policy is very important. Wills do not typically cover these types of assets. If no beneficiary is named, the court could decide what happens to your money.
When creating your estate plan, it is important to explore how each of these components can help you provide for your family.
An attorney can help you start thinking about your legacy and end-of-life wishes. They can also help you decide what to include in your will to best support your family.