Generally speaking, estate planning is the process of anticipating and arranging, during a person's life, for the management and disposal of that person's estate during the person's life and at and after death, while minimizing taxes. Estate planning includes planning for incapacity as well as a process of reducing or eliminating uncertainties over the administration of a probate and maximizing the value of the estate by reducing taxes and other expenses. The specific goals of the client are as simple or complex as the client's wants and needs dictate.
At the bare minimum, estate planning involves a will or trust, as well as powers of attorney, specifically the durable financial power of attorney and the power of attorney for healthcare. However, very often beneficiary designations, property ownership (joint tenancy with rights of survivorship, tenancy in common, etc.) and gifting needs to be considered as well.
Wills are a common estate planning tool, and are usually the simplest device for planning the distribution of an estate. It is important that a will be created and executed in compliance with the laws of the jurisdiction where it is created. However, a validly executed will in Nebraska will be recognized in all of the other states and vice versa.
A trust may be used as an estate planning tool to direct the distribution of assets after the person who creates the trust, usually called the settlor, passes away. Trusts may be used to provide for the distribution of funds for the benefit of minor children or developmentally disabled children. For example, a spendthrift trust may be used to prevent wasteful spending by a spendthrift child, or a special needs trust may be used for developmentally disabled children or adults. Trusts typically offer a high degree of control over management and disposition of assets.
An estate plan almost always includes the creation of several power of attorney documents, documents that direct what will happen to a person's estate and in relation to their personal care if the person becomes legally incapacitated. For example, an estate plan would include a durable power of attorney for financial and legal matters, and a healthcare power of attorney for all medical decisions, including an advance directive for end-of-life decisions.