Seven Questions About Estate Planning
If you’re struggling with the idea of not being able to ensure your family’s financial and legal future when you die, it might be time to talk with a lawyer about estate planning.
One of the most important aspects of estate planning is making sure that all your affairs are handled in such a way that your loved ones don’t have to go through an unsavoury legal battle upon your death. This can be achieved by making sure your will is up-to-date and that you know what steps have to be taken to ensure that your last wishes are respected.
This needs to be done even if you suspect that your estate planning needs were met years ago. In today’s economic climate, it can be difficult to know what a fair price for a home is or who deserves the inheritance from a deceased relative’s estate. This is especially true for businesses that may have been owned by your family for generations. Without the business transferable to your successors, there is nothing left of the business’ value on which you could base an estate plan.
What is an estate plan?
An estate plan is a set of instructions that you put together to help your family deal with your death. Without this, your family will face a legal battle that might make the estate-planning process look easy. A lawyer can make sure that your wishes are clear and that you have all of the facts about what should happen to your assets upon death.
Why is estate planning important?
For every estate that is worth a substantial amount of money, there are at least two or three others that are worth nothing. When you die, the direct beneficiaries often don’t benefit greatly from the estate’s assets because they didn’t inherit your wealth. The majority of people who inherit money through inheritance do not want to fight over the business or real estate owned by their relatives. In some cases, a family feud caused by an estate-planning failure can cost thousands of dollars in legal fees and court costs.
What are the benefits of estate planning?
Estate planning can make your estate have enough money to pay your debts, taxes, and approved expenses. If you are known to have a complicated financial situation, you can put together an estate plan that ensures that the people you trust with your money will take care of these needs. You could even provide for others who might not enjoy the same wealth as yourself if you want to help them realize their dreams of reaching financial independence at a young age.
What are the elements of an estate plan?
An estate plan needs to have your wishes outlined, including all of the details about what should happen to your assets at the time of your death. It can also contain a few additional elements if you really want to ensure that your family members don’t face any legal issues when you pass away. A will is a document outlining how you want to distribute your assets and who is going to be responsible for taking care of those assets until they are handed over.
A trust can be used to manage your financial affairs, making sure that the amount you leave to your family isn’t mishandled by a third party. It can also allow you to grant someone else to manage your estate for the benefit of your heirs. An advance directive is a document instructing medical professionals not to perform any procedures (such as CPR) if you are in a terminal or vegetative state. Although it has no binding power, it can clearly outline what you want to be done in the event of a serious medical emergency.
Why is a will important in estate planning?
A will is the best way to ensure that your money and other assets go to the people you want them to. It also clearly lays out how certain assets should be transferred, which can help make estate distribution easier. Estate distribution often takes some time because of the legal issues involved in drafting a will. A lawyer can help you establish a valid will that clarifies what should happen after you die.
When should I update my estate plan?
If you are getting married, divorced or have had a child, it is important to update your will. If you buy a home, get a mortgage or purchase something expensive, you should also update your estate plan to ensure that you aren’t leaving any debts to your family. Changes in the family can also lead to new estate-planning issues. For example, if someone becomes addicted to drugs, he might not be able to serve as executor of an estate plan.
How can I craft my estate plan?
An estate plan can be written by yourself or an attorney. Regardless of how you decide to create your estate plan, it should be clear and complete. You need to make sure that everyone understands the wishes of the person who is making the plan before you create it. If there are major changes that must be made, it’s best to make them before finalizing a will or trust.
If you need help creating or explicitly assigning assets in your estate planning process, refer to this link to consult with an experienced estate planning attorney.
Final Word: Estate Planning for the Self-Employed
A lot of people used to be self-employed, but many of them have switched to working for a company and are now employed by them. However, they still run their own business on the side. If you have managed your own business and have set up things well in advance, you will be able to pass on this wealth when you die. You can also get other professional people, such as an accountant or lawyer, so that they can help protect your assets from being distributed in the wrong way.