Estate Planning 101: Effective Strategies for Entrusting Your AssetsEstate Planning 101: Effective Strategies for Entrusting Your Assets
May 22, 2017 • Uncategorized
Most people want to experience the joys of living and do not want to think about what will happen after they die. The fact of the matter is, eventually it will happen to everyone and there is no way to know exactly when. If your affairs are not in order upon your death, your assets could be distributed in a way you would not like, leaving a burden on your loved ones. Read on to learn about the importance of estate planning and how you can effectively plan the division of your assets.
What is Estate Planning?
Your estate includes all of your assets, including cash, real estate, investments, personal property and everything else you own. Upon your death or loss of capacity, your estate will be passed on to someone else. If you want control over where your assets go and who is entrusted with your legacy, estate planning can help. Estate planning is the process of making arrangements for how your property will be passed on when you can no longer control it.
Who Uses Estate Planning?
Estate planning can be used by anyone. As long as you have property, you can assign it to a beneficiary through a will or trust. The size of your estate doesn’t matter; you own property with monetary and emotional value that should be fairly distributed according to your wishes.
Why is Estate Planning Important?
Estate planning is about more than passing on material possessions. It is also about passing on the values that you want to instill and providing security for your loved ones. If you do not use estate planning, the state government will assign your assets for you, including guardianship of minor children. You never know when an unfortunate event could take your life or leave you incapacitated, so there is no time like the present to start your estate planning.
What is the Difference Between Wills and Trusts?
Estate planning can involve the writing of a will that assigns your assets to different heirs upon your death. A will is a document with official statements directing the distribution of your property and accounts. It is difficult to avoid probate court with a will, and this can lead to costly court fees for your family.
Trusts give you the option to put certain conditions on when and how assets are divided, either before or after your death. Trusts allow you to skip probate court proceedings and can reduce the taxes on your gift. When a trust is set up, a trustee is appointed to manage the assets when you no longer can. The trustee has certain personal and legal responsibilities to uphold called fiduciary duties. In the case of the trustee’s breach of fiduciary duty, beneficiaries have the right to file a claim to receive their rightful entitlement.
How Can a Lawyer Help With Estate Planning?
Experienced estate planning attorneys have the necessary knowledge to effectively plan your estate in a way that clarifies your exact intent. Lawyers will review your assets and listen to your wishes for their division among your loved ones. They can give you advice on the best way to approach your estate planning and draft legal documents to manage your affairs appropriately.
Sometimes beneficiaries get hit with large taxes upon receiving an inheritance. A skilled lawyer should know how to assign your assets in a way that minimizes the burden left on your family. Additionally, wills with unclear stipulations can cause family arguments, some of which may turn into a costly probate dispute. A good lawyer can help you avoid this.
If you have not started your estate planning, what are you waiting for? Get started now and update your documents often to ensure your property is left to the people you want.