Having a plan in place to ensure the assets you’ve worked hard for is important. Estate planning doesn’t have to be a hard process and we will share some often-asked questions to help make the process easier.
Why is Estate Planning Necessary?
With an estate plan in place, you remove the burden of asset management from your heirs and provide a level of security for the future. There are various factors to take into consideration of what’s important. Some of these factors may include supplying financial support for your spouse or loved ones to still live a comparable life, or that decisions made align with your intentions. This also ensures assets will be distributed according to the guidelines in the beneficiary designation.
How to start Estate Planning?
There are simple steps to start an estate plan. Begin by taking an inventory of the assets you own. This can include tangible assets, such as homes and vehicles, as well as intangible assets, which may include savings accounts and retirement plans. Next, account for your family needs to ensure they will be taken care of. Deciding who will be the executor is also important, as they will be the voice to follow out any decisions you make.
What is a will, and do I need one?
Creating a will controls how assets will be distributed beyond death. Beneficiaries are named to receive assets or whether certain heirs are prohibited from receiving any assets. This is known as disinheriting an heir. It’s not required to have a will, but it is a good idea to have a plan in place for peace of mind. A will also helps to ensure your decisions are acted upon and cuts the stress loved ones can have when making these difficult decisions that can arise.
What is probate?
Probate is the process courts will use to enforce the will and handle any disputes that may arise. It is up to the executor of the will to inform the court of the individual passing away and to file the proper papers. This paperwork can include a Petition for Probate and notice to creditors/heirs to name a few. This process can sometimes take a year or longer because of the many steps involved and the number of forms needing to be submitted. Depending on how complex the estate or will, the more time it could take. Creating a trust can also remove the need for probate.
What is a trust?
A trust allows you or someone you choose to be a legal representative to use your assets according to your direction in death or when you are alive. This can help minimize estate taxes and provides other benefits when part of an estate plan. A benefit for a trust is if you are suddenly mentally incapacitated, your chosen representative can act upon your direction.
How to distribute assets?
When defining estate plan goals, consider what your goals are to help make the decisions easier. Ask yourself to whom you want to leave your financial assets as a starting point. If there is an heir with a pre-existing condition that may need support, this should be considered as well. Another consideration may align with specific assets that should be appointed to specific individuals. The more questions considered will help to make the decisions easier.
There are lots of estate planning professionals that are available to help make the process a smooth one as you start to think about all the decisions that are needed. Thinking about what is important will help you get started on your journey.
At Collington, we understand the importance of planning for your future, contact us to learn more about how we can help you with your future goals.