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Profit from an Esta te Plan

later in the chapter, there can be tax benefits associated with contributing to

charitable causes and organizations as well.
Finally, when you reach your golden years, you may want to add several

beneficiaries to your estate plan. You may also want to specify your wishes for
your funeral or internment, or your care, should you become incapacitated or
unable to care for yourself. Dealing with such end-of-life issues isn’t anyone’s
favorite task, but doing so in the present is the only way to ensure that your
wishes are followed in the future.
Once you have put your estate plan strategy into place, your work isn’t
done yet. Every few years, or annually if your life circumstances or wishes
change, you should review your estate plan to be sure it reflects your wishes. As

time goes on, your assets can grow and change, and so must your estate plan.
One last word here: Today, you can choose to direct what you want to

happen by setting up an estate plan that reflects your wishes. Tomorrow, you
may not have the opportunity.

Tools for Estate Planning

Now let’s look at some of the tools needed to build an effective estate plan.
Most of you are probably familiar with a will, which is the most popular form
of estate planning. Wills are simply written directives that outline how you
want the courts to distribute your assets and provide for your dependents
after your death. There’s a problem: Wills must still go through the court sys-
tem in an expensive and time-consuming process called probate, where the
court decides if your directives should be followed. A will is essentially just a
suggestion to the courts about how you want your assets distributed. In the
next section, we’ll discuss in more detail why you want to avoid probate. If a
will doesn’t help you properly plan your estate, what does? A trust . A trust is
a contract; one person (the Trustor) hands over property to another person
(the Trustee), with instructions to hold and manage the property for the benefi t
of a third party (the Beneficiary). There are many types of trusts to use for

estate planning.

Revocable Living Trust

In this type of trust, an individual (Trustor) or a couple (Trustors) transfer legal
title of assets from their name(s) to the Trustee(s) of the trust. According to the
terms outlined in the Trust document, the Trustee manages the trust property.
In most cases, however, the Trustor(s) often act as the initial Trustee(s) of the

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