If you are like most people, you think estate planning is only for the wealthy. The truth is that everyone - regardless of how much money they have - needs an estate plan.

What is an estate plan?

An estate plan is a program for the management and distribution of your assets upon your death, as well as instructions for handling your affairs should you become unable to do so while you are still alive. Your estate plan should include a will and/or a revocable living trust as well as updated beneficiary designations for your 401(k), IRA, etc.

Why do you need one?

An estate plan can not only reduce the taxes your heirs must pay on assets they receive from your estate, but can also ensure that your accumulated wealth will go to the individuals that you intend to receive it.

Whether you create a simple will or a revocable living trust, it is important to have a durable power of attorney. A durable power of attorney is a document that designates a person who can sign on your behalf and handle your financial matters in the event of your incapacity. A durable power of attorney becomes void at death.