Creating an estate plan is about making sure your loved ones are protected after you’re gone.

An estate plan is a valuable set of documents outlining plans for your assets and family after you die. While everyone’s needs differ, ensuring your property and family are cared for is essential. It also has tax benefits.

Estate planning is the process of creating legal documents that outline:

• How to distribute your property after you die
• Who will get custody of your children and pets
• Who will make financial and medical decisions on your behalf once you can no longer make them yourself

In addition to this documentation, an estate plan can include life insurance and long-term care insurance policies.

The goal is to protect you, your family and your assets. An estate plan ensures your property is transferred to the appropriate people while limiting estate taxes to maximize the legacy you pass to your heirs. The tax burden can vary based on your estate’s value and your state’s tax threshold, with larger estates typically incurring higher tax bills.

Dying without a will is called dying intestate. If you die intestate, your state’s laws determine who gets your property and who gets custody of your children. An estate plan allows you to make these choices based on your wishes and your family’s best interests.

An estate plan may involve a will, trust, power of attorney (POA) and health care directives. You can use an online service or work with various professionals — such as your financial planner, estate attorney and accountant — to create these documents.

Source:  Alison Tobin, Estate Planning Checklist, Money Magazine, Nov 27, 2023.