To put it simply, estate planning involves deciding how you want your assets distributed after you die (or become unable to make your own financial
decisions). Estate planning can be complicated, so it’s best to consult a financial adviser and a
lawyer when drawing up your estate plan.

It’s important to have a basic estate plan in place regardless of your net worth. Although it may seem like a morbid chore, estate planning offers
several benefits:

  • You get to name the people to whom you wish to give your assets – and your wishes will be legally binding.
  • You can arrange it so that taxes siphon as little as possible from your estate.
  • You have the satisfaction of knowing that your financial affairs are in order, so you won’t bequeath a costly administrative nightmare to your
    loved ones.

An estate plan can include several elements:

  • A will
  • Assignment of power of attorney, which gives the person you name the authority to manage your financial affairs if you are unable to do
    so
  • A living will, which is a statement
    of your wishes for the kind of life-sustaining medical intervention you want, or don’t want, in the event that you become terminally
    ill and unable to communicate
  • A healthcare proxy, which authorizes someone you trust to make medical decisions on your behalf.

Source: Blog