Estate planning is the process of taking precautions for your loved ones after you pass.
Estate planning includes life insurance policies and wills, which are written letters detailing what you would like to happen with your property and possessions after you die.
There are many benefits to estate planning such as protecting loved ones from losing their inheritance in case of death and being able to pass on a specific portion of your personal wealth in a timely fashion.
Your estate plan can also benefit individuals outside your immediate family; you can also create trusts for friends, children’s educational institutions or foundations, charitable organizations etc.
Reach out to Professionals
It is highly recommended that you engage the services of a professional estate planner or law firm like atkins dellow. Using a professional service will ensure your estate is in safe hands and everything is fully above board, though you can do these things yourself if you feel confident enough.
Who Needs a Will?
Wills are written instructions for what will happen to your money, possessions, and other assets after you die. This can include the following:
- Family inheritance
- Legal issues of a will
- Estate tax reductions
A will is a legal document signed by the testator(you).
Generally, it confirms how you want your property to be divided up among beneficiaries (the people who will receive assets that you have specified in your will) upon your death and also shows ownership of assets.
A minor has no legal standing for a will unless it is approved by a court; in which case his/her name can be put on the document as a beneficiary.
Any other type of estate planning document must have a witness. A witness can be anybody who doesn’t have a vested interest in your estate. The witness will sign at the end of the document to verify that the document was signed in front of them.
The Difference Between Wills and Trusts
In a will, you state that you want to give specific assets to your family members and what they can do with the assets.
It is recommended that you do not leave children more than they can handle, and limit gifts during their lifetime. Also, be sure to name them as beneficiaries in case of your death.
If there are any issues that you wish to be resolved by the probate court, these must be included in the will. This could include outstanding taxes or unresolved property issues after death.
A trust is a legal document that is set up for your long-term care, or for a specific asset. It will allow you to keep control of your assets throughout your life and protect them from the claims of creditors and loved ones.
There are many benefits to having a trust, such as access to money while you are alive, protecting assets from loss if you become incapacitated, and they make the distribution of assets after death more simplified and predictable.
There are several types of trusts including:
- Revocable trusts
- Irrevocable trusts
- Charitable trusts
Revocable Trusts are trusts that can be altered, amended, or terminated at any time by the owner of the trust. Usually, revocable trusts are used to avoid probate and keep the assets under your control until your death.