What type of planning includes preparing legal documents for after death?

Estate planning involves creating legal documents that manage an individual's assets and affairs in the event of their passing. This includes the preparation of wills, trusts, powers of attorney, and healthcare directives, all of which specify how a person's assets should be distributed, who will be responsible for managing their affairs, and how their healthcare decisions should be made if they can no longer communicate their wishes.

Effective estate planning ensures that an individual's wishes are honored and provides clarity and direction for loved ones during a difficult time. It also helps minimize the potential for disputes among heirs and can assist in reducing estate taxes or other financial burdens that may arise after death. This specific focus on the management of assets upon death clearly distinguishes estate planning from other types of financial planning, such as investment or tax planning, which do not directly address the distribution of assets after an individual is deceased.