People usually think about what will happen to their assets if they die. If you are also thinking the same, you must go for estate planning. It decides on how to leave and distribute all the possessions for your loved ones. You can hire a real estate attorney to take care of your estate planning. Having a complete estate plan explains the handling of the property and suggests a guardian of your kids who will take care of them after your death. In this blog, we will discuss estate planning, myths, and factors affecting it.
What Is An Estate Plan?
An estate plan is a complete collection of planned events before death and after death. Not only plans of after death like funeral arrangements and property distribution are included in planning but also before death events. In other words, we can also call estate planning life planning.
Another definition of estate planning is the collection of legal documents to clarify intentions and explain justification in the following two situations.
- What will happen to your possessions if you pass away.
- What will happen in the future if you fail to take care of your assets?
In your estate planning, the collection of everything related to you is included such as cash, personal property, business interest, and investment. Proper estate planning will prevent your kids from fighting with one another to get a particular asset.
Eligibility For Estate Planning
Everyone who owns something valuable should go for estate planning. No matter whether you are a rich person or not, an adult or an old man, you can plan to make the life of your loved ones easier after your death. This will save them from discussions about legal and financial matters in grief. If you are unable to plan yourself, you should contact a real estate attorney for estate planning.
Working Of An Estate Planning
Estate planning included documentation of different legal documents to explain everything about finances. You not only need a single document but many for this purpose. However, this time-consuming planning has been made easier by technological advancement. Despite the presence of online tools, it is preferable to contact an estate attorney for a high-quality plan. In the end, check your plan to make sure to avoid federal taxes and others.
4 Common Myths About Estate Planning
Here we will discuss some common myths about estate planning that need to be dispelled.
Myth # 1: Youngsters Have No Need To Worry About It
It has been observed that adults also have multiple bank accounts, personal property, debts, and others even in their 30s. No doubt it’s hard to think about your death but life is unpredictable. We should get ready for anything anytime. To protect your family from dealings related to your interest, estate planning is the need of everyone.
Myth # 2: No Need For Plan As Everything Will Go To My Spouse
Another common myth that exists in the minds of married people is why there is a need for an estate plan when everything will be for my spouse and children. An estate plan will protect your property from undergoing contesting ownerships. To avoid family disputes and other disbursements related to monthly assets, estate planning is important. Moreover, what will happen if your spouse dies before you. It depicts that you must need estate planning for your loved ones.
Myth # 3: My Family Will Do Everything Without Any Dispute
People usually believe that their family and friends will follow all their wishes after death without any dispute. But what if they don’t know about your legal decisions? Having a legal document requires them to follow your estate [planning regarding the distribution of your assets. Hence, there will be no dispute causing trouble for your loved ones in grief.
Myth # 4: No Need To Update Plan After Its Creation
Another common myth is there is no need to update estate planning when you are done with it for once. Well! Think about the situation in which someone has divorced his spouse. Will he still want to give all his belongings to his ex-spouse? It depicts that you need to update your estate planning document from time to time.
How To Create Your Estate Plan?
An estate plan is a control elaborating on who will receive your assets after your death. It is also helpful in protecting you from unforeseen medical emergencies. Leave a long-lasting legacy by protecting your beneficiaries’ inheritance from any loss of time and privacy. Follow these steps to create your estate planning.
1- Make A Stock List Of Your Belongings
The very first thing you need to do is make a stock list of all your possessions. If you have any one of these such as a home, vehicle, valuable personal item like jewelry, cash, savings or retirement account, investments, debts, insurance policy, business interest, you need estate planning. Collect documents of your property and outline in your estate plan what distribution will be given to your loved ones.
2- Compare Your Wills And Trusts
Whenever you go for estate planning, you should evaluate the difference between trust and wills. A will is a determination of who will receive your property, while a trust explains the factors on which you decide at which period and age your assets will be distributed to your inheritance beneficiaries. No matter whether you go for a will or a trust, it’s essential to have a durable, health-directive power of attorney.
3- Evaluate Your Beneficiaries
It’s a trend to transfer assets to the immediate family and the next generation. But before making any final decision, you need to evaluate your beneficiaries including nephews, nieces, grandchildren, and friends along with your children, spouse, parents, and siblings.
If you want to transfer your wealth to your grandchildren, make sure to restrict them in decisions with certain limitations. having age below 18, it will be handled by a trust or court-approved guardian. Make an appointment with an attorney to receive valuable guidance regarding asset distribution to minor beneficiaries.
4- Make An Outline Of Your Wishes For Medical Care And Funereal
Along with making decisions for your loved ones, you should plan your funeral and medical care in case of any in capacitance. The best way is to pay or reserve payment for your funeral arrangement to relieve the burden of your loved ones. Moreover, determine all the events and affairs to manage health regarding decisions in case of a medical problem.
5- Contact An Estate Planning Attorney
It’s a difficult task to distribute everything among your loved ones in a fair manner. A real estate lawyer will not design a plan for you but also give you confidence in the fair distribution of assets. Feel free to contact an estate planning attorney to get a customized plan in compliance with the law and your legacy wishes.
6- Revisit Your Estate Plan Regularly
There is no need to forget your estate plan after its creation. It’s mandatory to review it periodically to make amendments to it. For instance, a change in your life can take place that can increase or decrease the number of your beneficiaries or your property. If you have experienced any one of these life events like marriage, divorce, the birth of a child, employment change, buying of property, grandchildren birth, or physical health, you should update your plan accordingly.
Estate Planning And Wills
In case of a person’s death without any will, the government will distribute your property. Every single belonging to you will be distributed as per state regulations. As state laws are not per your desires, you should leave a will to cease the burden of your loved ones in difficult times. Here are some valid functions of an up-to-date will:
- Reduce unnecessary legal fees to make property and assets transfer to beneficiaries easy.
- Will plays a role in expediting legal proceedings with the less stressful settlements.
- Appointment of an executor who will fairly manage the estate distribution.
- You should designate a guardian for your children in case both of your parents die. It’s a very important part of will for children’s take care of.
- Reduce confusions and disputes among your loved ones.
Estate Plan Tools To Work In Conjunction With A Will
While designing a will, make sure to include the things to be considered in case of your health issues. Will is a pre-decision making to keep things fair for your loved ones by outlining all the assets and health care management issues. The following are some legal tools or documents that pair up with a will.
Financial Power Of Attorney
Someone with this authority is responsible for managing legal and financial matters. Financial power of authority is often given to someone in specific circumstances for a limited time.
General Power Of Attorney
A General Power of Attorney is the most essential legal document of your will. To understand this, let’s suppose a circumstance in which you fail to manage your affairs like financial and business transactions. If you want someone to do all these dealings on your behalf in your absence, you need to grant him a general POA.
Healthcare Power Of Attorney
Healthcare power of attorney is an advanced health directive in which a person’s name is mentioned who will take medical decisions for your health in critical conditions. This healthcare power of attorney is also known as a durable power of healthcare attorney or a healthcare proxy.
In short, real estate planning is very effective in managing your property affairs for your loved ones. Feel free to hire a real estate attorney for making your customized estate plan at a budget-friendly cost. Make a will and relieve your loved ones from the burden of distribution of your finances.