In estate planning, you need to set up a plan that establishes your will and who receives your assets and funds after you pass away. It also plans on how you want your financial and legal matters to be handled in case you are unable to handle them on your own. Many people believe that estate planning just focuses on finance, but that is not the case at all.
No doubt, establishing an estate plan can be an overwhelming and difficult task. Even if you already have an estate plan in place, it’s important to update it regularly so that it is easy for your family members to receive their entitled benefits without ending up in a legal mess. Your assets can even reach the wrong heir if you don’t establish a proper will and estate plan. Further, we’ll read the basics of estate planning that everyone must know and understand.
Basics of Estate Planning That You Should Know
Most of the time, an estate plan does not get the attention it deserves being such an important part of financial management. Without a clear plan, any family dealing with the death of their beloved member can face confusion and conflicts related to asset distribution.
Working with an estate planning attorney is really vital for proper planning of your estate. This makes sure that your assets are protected and your beneficiaries can receive them without wasting their time and money on legal battles. Let’s check out the basics of a well-designed estate plan.
Keep Your Will Updated
It’s hard to prepare your will as you have to think about your death and make decisions that will have an impact even after you pass away. However, it is the most basic part of your estate plan as it outlines your asset distribution, appointing guardians for your kids, appoints managers for your properties, etc. to reduce conflicts between your chosen beneficiaries.
Also, creating your will is important but even more vital is to keep it updated. This way you can make sure that it shows changes in your legal landscape, asset ownership, personal life, and more. A will does not include jointly-owned properties and trust assets, assets with other beneficiaries, etc. and you have to address all this separately in your estate plan.
Remember to Make Trusts for Beneficiaries
In contrast to your will, a trust will allow management and distribution of your assets while you’re alive and after you pass away. Through a trust, you can avoid probate and plan for your incapacity. There are several types of trusts that you must know about.
A revocable or living trust offers flexibility as you can change or dissolve it while you’re alive but it becomes irrevocable after death. Irrevocable trusts cannot be amended once you establish them. However, they protect your entire estate from creditors, while offering many tax benefits.
Ensure Designating Your Beneficiaries
Make sure that you name your beneficiaries on financial tools, retirement accounts, insurance policies, etc. This makes sure that your beneficiaries won’t face expensive and lengthy legal and probate processes after your death.
Most people believe that their will controls everything related to distribution of their assets but this is not the case when you name beneficiary designations. Make sure that your beneficiary designations are updated after any significant event in your life.
Establish a Power of Attorney for Your Healthcare
There will come a time in your life when you won’t be able to communicate medical preferences and requirements. Your healthcare power of attorney will make sure that your healthcare needs are implemented and respected even when you can’t express them yourself.
Work with your estate planning attorney to establish a healthcare power of attorney in a legal manner. The steps to create this document involve the signature of a principal as well as the presence of notarization or witnesses.
Ensure Designations for Your Minor Kids’ Guardianship
To protect minor kids or incapacitated adults in your family, guardianship designations play a major role. Make sure to consider this during estate planning so that your loved ones are taken care of according to your wish.
The state will intervene if there are no such designations and the court will appoint a guardian in this case, without respecting your preferences and wishes. Your kids may not receive optimal care based on your wishes, and therefore, guardianship designation is vital.
Conclusion
With a proper estate plan in place, you can ensure proper distribution of your assets without any conflicts among your family members. Also, through this, you can make sure that your kids and other family members are taken care of according to your wishes and preferences.
However, estate planning is not an easy task and you can seek help from experienced attorneys like Challae Taniel Porter for the best solutions. Make sure to have an ideal estate plan in place to protect the future of your beloved family members even after you pass away.