Few people relish estate planning. After all, deciding how you want your assets distributed after you die can serve as an unnerving reminder of your mortality.  Yet an Estate Plan – irrespective of the size or composition of the estate – is an essential means to protect your family’s future wealth and financial well being.  So there should be plenty of reasons to tackle the task with some enthusiasm:

• You get to name the people to whom you wish to give your assets and know that your wishes carry the word of law.

• You can arrange it so that taxes siphon as little from your pot of gold as possible.

• And you have the satisfaction of knowing that your financial affairs are in order and that you’re not bequeathing a costly administrative nightmare to your loved ones.

Even the most basic Estate Plan consists of a Will, Living Will and Power of Attorney. For some people, a trust may also make sense.

Taking inventory of your assets is a good place to start.

Your assets include your investments, retirement savings, insurance policies, and real estate or business interests. Ask yourself three questions: Whom do you want to inherit your assets? Whom do you want handling your financial affairs if you’re ever incapacitated? Whom do you want making medical decisions for you if you become unable to make them for yourself?

Everybody needs a will.

A will tells the world exactly where you want your assets distributed when you die. It’s also the best place to name guardians for your children. Dying without a will – also known as dying “intestate” – can be costly to your heirs and leaves you no say over who gets your assets. Even if you have a trust, you still need a will to take care of any holdings outside of that trust when you die.

The basic will should identify the Testator (the person making the will), revoke all prior wills, and may also provide for the disposition of specific items of the estate (bequests), such as stamp collections or articles of jewelry. In the will, reference can be made to a separate document – to be found with the will – which can also legally dispose of these items of person property. This separate document, if properly executed, kept and ultimately found with the will, can be changed to make a new disposition, without the need for changing the entire will. The will may also identify those parties who will receive the balance of the estate after these specific bequests are made (called the “residuary estate”).

The Testator may also appoint other persons to carry out certain duties for the estate, such as the Executor, Guardian and Trustees. An Executor is given the task of ascertaining the extent of the estate, collecting all of the assets of the estate and distributing them to the beneficiaries under the will after the estate debts have been paid. The Guardian will be appointed in the event that there are children under legal age who will require to be cared for in the event of the death of either or both parents. In the event that there are assets being left to minor children, a Trust will be created for the benefit of such minor children. A Trustee will be appointed to administer such trust assets for the benefit of each such minor child until the child reaches the age at which the Testator directs that such child will receive the principal of the trust.

As for a living will, the person signing the living will may not only appoint a Healthcare Representative who is given the responsibility to make healthcare decisions when the “Testator” cannot, but the living will may also outline what medical treatment is required to be provided or withheld, and may also provide for the donation of organs.

A power of attorney (POA) is also a key document in the Estate Plan. The power of attorney allows one to select a person (or persons) to act on one’s behalf to make financial and personal decisions. Such power can be granted to take effect only once the provider of the POA becomes incapacitated and remains through the course of such incapacity (a “springing” POA), or grants that power outright to the holder from the time of the signing (a “durable” POA since it remains in effect from the time of the signing through any subsequent incapacity). However, care must be taken in selecting the type of power of attorney. For example, in selecting a durable POA, one might be sacrificing security in exchange for the ease of use. In preparing the Estate Plan, consulting with your attorney, your financial advisor and your accountant are all keys in assuring that all of your estate planning goals are taken into consideration.

ROBERT F. SCHILLBERG, JR.,is an attorney licensed in New Jersey and New York, with an office in Red Bank, New Jersey, practicing primarily in the areas of business and corporate law, civil litigation, municipal court, and residential/commercial real estate.