Planning your estate comes with a lot of decisions. The good news is that you can change your plan over time if there are things that come up that make you rethink some of the decisions you made previously. There are some exceptions to this, such as irrevocable trusts, so make sure you know which ones you can change when you are developing your estate plan.
There are some factors that might impact your decisions. You should take the time to understand exactly what options you have for each facet of the estate plan.
- Executor and trustee: The executor is over your entire estate. The trustee is only over a trust. You should ensure that the individuals you choose are mentally and physically able to handle their duties. One important point is that they have fiduciary duties, so they must be able to make decisions about assets or money. They have to be able to keep the beneficiaries in mind when they do these.
- Powers of attorney: You will give someone powers of attorney over your finances and someone these powers over your health care. They have to be able to make decisions for you when you aren't able to do so on your own. They can't focus on anything other than what is best for you and what your wishes are.
- Guardians: If you have minor children, you will set a guardian for them as part of the estate plan. This person has to be in a position to raise your children. They should be willing to do this. Ideally, you will choose someone who has ideals and values that are similar to your own so they can raise the children with these in mind.
- Heirs and beneficiaries: Most people focus on immediate family members as their heirs and beneficiaries. Make sure that you do take care of these individuals, but you might decide that you want to help others. For example, you may want to leave something to a favorite and trusted charity. You can do all this through your estate plan.
Review your estate plan at least once per year. Look at who you have in each of these positions and figure out if you need to change anything. You also need to go through the plan with tax and financial consequences in mind. Laws change often so don't assume that everything is the same as when you initially established the plan.