The basic purpose of an estate plan is to carry out the specific plans/requirements of the estate owner after his death. There are a variety of tools that can be used to guarantee the most favorable distribution of weal and assets.
The fundamental strategies used for estate planning are listed below:
These are the most widely used tools for estate planning. A will designates the beneficiaries who stand to inherit the property – it sets forth who gets what. In addition to that, wills are often used to appoint guardians for children (minors) and detail out the funeral arrangements that should be made when the estate owner dies.
In order to be enforceable, all wills have to pass through probate court.
Trusts are a form of arrangement that allow the estate holder to appoint trustee(s) for the distribution of the estate to the beneficiaries pursuant to the terms set forth in the trust. The beneficiary in this case could be family, friend(s), charity, or even a pet.
Power of Attorney
A power of attorney assigns a third party for the management of an individual's estate when they are no longer able to look after it on their own. A power of attorney can designate a member of the family, a trusted professional, or a friend to handle this position.
It should be kept in mind that the use of each specific strategy depends upon the number of beneficiaries, the estate size, and the basic purpose of estate distributions.