What are Some of the Estate Planning Tools Available to Me?

There are a variety of different estate planning tools available to fit any individual or family situation. These tools consider a number of factors, such as finances, medical history, disability, marriage, and personal preferences. Here is a breakdown of the most commonly used estate planning tools.

[1] What are Some of the Estate Planning Tools Available to Me?

There are a variety of different estate planning tools available to fit any individual or family situation. These tools consider a number of factors, such as finances, medical history, disability, marriage, and personal preferences.  Here is a breakdown of the most commonly used estate planning tools:

• Will – every estate plan should include a will. It’s a document that disposes of an individual’s probate property at death and it may also appoint guardians for minor children.
• Trust – a device that creates a special ownership relationship of certain properties between the trustee(s) and the beneficiary(ies). The trustee holds legal title of the property, with the duty and right to manage the property for the benefit of the beneficiary, who holds equitable title to the property, which is the economic interest in the property. There are many different types of trusts which all are used to produce a very specific result.
• Living Will – every estate plan should include a living will. Living wills, also known as “advance medical directives”, indicate the medical instructions and desires to be fulfilled in the event that an individual is unable to make them, due to some medical emergency, like a terminal illness or an irreversible coma. 
• Durable Power of Attorney for Healthcare (Healthcare Proxy) – this document appoints another individual as an agent to make healthcare decisions in the event the principal is unable to do so.
• Durable Power of Attorney for Finances - document that designates a person to act on your behalf with regard to finances in the event of incapacitation. Document can also go into effect now, if you require assistance with handling your financial affairs.

[2] Business Succession Plans

Did you know that business succession planning is a part of estate planning? A business succession plan can be looked at like a retirement plan for entrepreneurs. You don't want to work until the day you die, but you also don't want your business to cease to exist simply because you no longer run it. This is where the business succession plan comes into play. It's a plan that determines who takes over the business and on what terms. This requires proper care, consideration and preparation, and should be planned for in the earlier stages of a business, rather than later.

Business succession plans have a number of benefits, including, but not limited to the following:

1. Business owners agree upon a predetermined price for the value of their shares of the company, so it eliminates the need for performing a valuation of the company upon death since a fixed price was previously determined;

2. Succession plans aid in the timely administration of an estate;

3. Policy benefits are available immediately upon death so that the price for the deceased owner's share is covered, thereby preventing liquidation of remaining business assets to satisfy the cost of deceased owner's interest; and,

4. Succession plans give the owner control over the outcome of the business, without which, laws, government and attorneys will inevitably make the determination.

Every entrepreneur should consult an attorney to assist them with making a smooth and equitable transition of their business interests.