Estate planning can involve many difficult conversations for older Texans and their families. With so many different tools and terminologies to understand, it makes sense that you would put the conversation off for as long as possible. As complicated as it might seem, talking about your estate plans early and often can help make the process as easy as possible for your loved one when the time comes.
What’s the most common estate planning tools?
Your estate plan is any documents, accounts, or other pieces of information that will be used to carry out your last wishes and pass your belongings down to surviving family members. Some common estate planning tools used to accomplish this are:
- Wills
- Trusts
- Life insurance policies
All of these tools serve a different purpose, and you may or may not need all of them. What you use depends solely on your situation.
Difference between wills and trusts
Wills are generally the most common estate planning tool. It’s used in conjunction with life insurance policies and trusts to clearly state a person’s last wishes and address any assets that might not be covered by other tools – such as heirlooms.
Trusts are special accounts used to distribute money and assets to beneficiaries. Trusts are most often used to avoid estate taxes and probate court, but can also be used to ensure money is kept safe for minor beneficiaries.
Choosing the right tools for you
You’ll have to address other things in your estate plan, such as who has power of attorney and advanced directives if you can’t make decisions for yourself. However, all of these can be decided with help of your friends and family.
It’s important to revisit your estate plan frequently to update outdated directives and instructions as needed. This will help make sure that the process goes easy and smooth for your loved ones after you’re gone.