Estate Planning
Definition
Creating documents (will, trust, power of attorney) that specify what happens to your assets and who makes medical and financial decisions if you die or become incapacitated. Includes minimizing estate taxes and specifying guardians for minor children.
Why It Matters
Without a plan, the state decides how to distribute your assets (usually to spouse and children but not always), and your family faces costly probate. A simple will costs $300-1000 but saves your family thousands and heartache.
Example
Create a will designating your sibling as guardian for your kids and naming your spouse as executor. Create a durable power of attorney so your spouse can manage finances if you're in a coma. Without these, courts decide instead.