When preparing for the golden years, a critical factor is making sure that finances are in good order. This includes estate planning, which combines making sure that the later years of life are taken care of and that finances are apportioned to the next generation as desired. There are multiple components to consider.
First, a will. This is the most basic and most widely used estate tool available. In order to make sure that the one you have will hold up in probate court, it is important to have an attorney review it. Better yet, you can get an attorney's advice in the writing process to make sure that everything is as it should be.
The will is the key way to specify which heirs will get which possessions. It can also determine who will be the guardians of your children if you pass away before they reach adulthood. The will can also be used to set up trusts.
Trusts are another useful tool. Typically, they are set up by an estate planning attorney. There are many different kinds of trusts, and they are a good way to specifically control funds. The money and assets they are used to manage can be available to you in part in your lifetime, with specific portions reserved for your heirs. Trusts can be a great option if you have sizable resources, or want to distribute them on a particular timetable.
These are just two key components to estate planning. There are many others available. A qualified professional can advise you on all of your options and help you determine which ones are best for you.
Source: finweb.com, "5 Estate Planning Options" Sep. 11, 2014