Estate planning is simply a compilation of tools that help you plan the division of assets, values and religious effects after you no longer inhabit this world. It is a necessary job that makes you face the fact that you will not always be around to take care of your loved ones. You can ensure by taking the right steps at the appropriate time that your family enjoys the assets you have painstakingly assimilated in your lifetime.
Making Will is the First Step of Estate Panning
The first step that you take to take your legacy in control is to make a will. This piece of paper will ensure that you state your desire about who should inherit your property. You can entrust your kids to a guardian, and ensure that your property is safe.
Create An Irrevocable Trust
The next thing that you can do to keep your family safe and save prohibitive probate costs is to create an irrevocable trust. This living trust can hold all your assets, both personal and from the business. The trust does not require probate and is relatively simpler and less expensive. It might be a tad more expensive when you create the trust though.
Leave Behind Healthcare Directives
The living will or healthcare directive bequeaths power to a person of your choice to make a health-related choice for you if you are deemed incapable of taking such a decision. This will require you to sign a power of attorney in favour of the appointed person.
Appoint A Financial Power Of Attorney
You can appoint a trusted and knowledgeable person as the executor of your financial directives. The durable power of attorney for finances will be the person who will handle your finances if you are unfortunately declared unfit to handle your own affairs.
Tips To Skip The Probate Process During Estate Planning
Name your spouse or children as beneficiaries or nominees in all bank accounts, insurance plans, investments and brokerage accounts. This will automatically initiate the transfer to the beneficiary upon your demise. The process is faster and less expensive than along drawn-out probate. Insurance can also be a good way to ensure that your nominees are insulated from an economic loss at your passing. The claim is not under the purview of probate, so the family gets it directly.
Cover Funeral Costs in Estate Planning
It may sound morbid but it is the best way to protect your loved ones from spending a large amount they cannot afford to at the funeral. It takes time for other instruments to mature. The funeral costs can be covered by a payable at death bank account which is funded adequately to cover all expenses at the unfortunate event.
Understanding Estate Taxes
The process of probate is long and expensive. All the states have different laws regarding estate taxes. It is best to take the help of a professional estate planning attorney who can formulate a proper plan for you to mitigate legal costs and make your estate tax efficient. Many an inheritance has dwindled substantially when subjected to exorbitant state taxes.
The lawyer can help you park your assets in ways that will help your legal heirs claim what is rightfully theirs with minimal expense. It is not possible for lay persons to understand the legal and tax implications that are associated with estate planning.
Keep Your Documents Handy For Apt Estate Planning
It is imperative that you keep all the above documents handy and in the knowledge of the executor of your will. If your documents are not accessible, all the trouble you have taken to do estate planning will go to waste. The documents that your heirs would require are your will, the trust, real estate deeds, insurance policies, information on bank accounts, debit and credit cards, details of any investments made, certificates for any stocks or bonds, retirement plans and so on.
The funeral instructions and account details would be a must too. The grief of your loved ones at this time cannot be assuaged, but it can be helped by making the claim process a little easier. So, better you organize all your relevant documents and inform the executor of your will about the same.
These simple steps can help you create an estate plan. But, do remember that the process is tedious and even one slip can cost your family their peace of mind. Go that extra mile and get the estate planning done from an expert. Choose the best way to keep your family safe and sound.