If there is one thing that the year 2020 showed us, it is to expect the unexpected. No one could have anticipated a global pandemic, a quarantine, and mass unemployment. COVID19 left many ill, incapacitated, and without loved ones. This may have many people on edge and wonder about their future, their family’s future, and the future of their estate.
Estate planning is essential to properly manage the well-being of yourself, your family, and possessions in case something were to happen to you. Here are 5 quick yet important facts about estate planning to get you pointed in the right direction.
Bell & Associates Consulting Firm would be more than happy to assist you in the process of securing your assets and property – contact us today to learn more about our Legacy Planning Services!
1. Estate plans are prepared to manage a person’s assets in case they become incapacitated or die. Estate planning involves asset preservation, management, and distribution post-death or incapacitation. Planning tasks include preparing a will, setting up a trust/donations, naming an executor and beneficiaries, and funeral arrangements. Estate planning also includes who gains custody of minor children.
2. Estate plans are often developed by an experienced estate law attorney. Other individuals that may be of service include financial advisors and tax professionals. Having the proper people assisting you during the process can be key to developing a proper estate plan.
3. Assets compose a person’s net worth. Assets include, but are not limited to, houses, cars, stocks, artwork, life insurance, pensions, and debt. Pretty much anything one finds value in can be an asset. Interestingly, in our digital age, digital assets exist. Passwords, photos, and online presence are all assets that can be designated to an individual.
4. A will is a legal document that gives instructions on how property and minor children should be dealt with. There are 2 types of wills. A living will document is referenced in case you are incapacitated and need someone to make decisions on your behalf. The last will document is referenced after death and designates beneficiaries for your property, and declares guardians for minor children.
5. Creating trusts and giving donations aid to reduce estate taxes. A trust is described as an agreement in which a trustor gives the right to hold the title to property or assets to a trustee until it is time to pass it on to a beneficiary. Essentially, a trust preserves property and assets until the intended beneficiary, often children or grandchildren, can receive them. Also, giving charitable donations can reduce estate taxes for the benefit of descendants.
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Estate planning is critical, especially if there are any assets or property at stake and multiple people to divide amongst. Estate planning can reduce and often alleviate fighting within a family over property and possessions. Discuss your plans with your beneficiaries, let them know what you are thinking and how they may have to manage certain things in your absence. There is absolutely no reason not to investigate developing an estate plan. Without one, you, your family, and everything you have worked for will be at risk.