Estate Planning Foundations: What Families Should Understand

Estate planning is the process of arranging how assets will be managed and transferred when someone dies or becomes incapacitated. This guide explains, in plain language, the foundational tools and concepts. It is educational only and is not legal or financial advice.

What Estate Planning Addresses

Estate planning typically addresses three questions: who receives your assets, who makes decisions if you cannot, and how taxes and costs are managed. The answers depend on legal documents, beneficiary elections, and state law.

Common Estate Planning Tools

• **Wills**: A legal document that directs how probate assets (those owned in your name alone) are distributed after death.
• **Trusts**: Legal entities that can hold and manage assets according to written instructions, often used to avoid probate or control timing of distributions.
• **Beneficiary designations**: Instructions on retirement accounts, life insurance, and some other assets that transfer directly to named individuals, bypassing the will.
• **Powers of attorney**: Documents authorizing someone to make financial or healthcare decisions if you cannot.

Probate

Probate is the court-supervised process of validating a will and distributing assets. Some assets avoid probate (beneficiary-designated accounts, jointly-owned property, trust assets). The process and cost vary by state.

Where to Start

Families often start by inventorying what they own and considering who they want to make decisions and receive assets. An estate planning attorney can explain how state law applies to your situation and draft the appropriate documents. Mathis does not provide legal advice on these matters.