Not everyone understands what an estate involves. Many assume that an estate refers to the assets of a deceased person who had a high net worth. That’s not an accurate definition, as people of even modest means have an estate when they pass away in Alabama. Essentially, an estate refers to all assets and property owned by the deceased. Devising an estate plan allows the planner to determine what happens to those assets, among other matters.
Devising an estate plan
Writing a last will and testament allows someone to decide which beneficiaries receive what assets and might task them with specified responsibilities. The planning stage also allows the testator to choose an executor to act as the estate’s representative. Such planning could avoid the alternative: allowing Alabama’s intestate laws to govern the distribution of assets when someone dies without a will.
If someone does not take the time to craft a workable estate plan, arguments and other strife may occur with surviving family members and others. Burdening family members with otherwise avoidable problems could make dealing with someone’s passing even worse.
Other elements of estate planning
Planning an estate could involve other duties besides writing a will. Some decisions could involve exploring options to move assets outside of probate, such as designating transfer-on-death beneficiaries on certain financial accounts. Others may consider setting up a trust.
Estate planning may involve financial directives during the planner’s life. An older adult might choose to direct decisions to an agent under a power of attorney contract. Others could be unfamiliar with tax matters or investing and sign such duties to a relative.
Health issues could worry someone who fears becoming incapacitated. A living will or a health care proxy document might address those matters.