Many people believe that estate planning is only for the wealthy and famous, which is a common misconception. After all, why would you want to leave a will if you don’t believe you have anything to leave behind?
The reality is that estate planning will not only assist you in preserving your assets while you are alive but it will also help you avoid a great deal of red tape in the future.
You might think that a small house with three adult children isn’t much if you have three adult children and a small house. But what happens when you’re no longer alive?
Which of the children will inherit the house? Will it be sold, with the proceeds being divided equally among the three of them? What if one of them was able to assist you in paying off 25 percent of your home loan while the other two were unable to? Would you want that child to receive a more considerable sum of money than the other two children?
All of these essential questions can be answered with the help of proper estate planning procedures. Please take note: it will be best to hire a professional estate planner to guide you through this process, preferably one who has experience in elder law.
When it comes to estate planning, there are many factors to consider, and an expert will guide you through the process.
Generally speaking, these are the terms you’ll need to be familiar with regarding estate planning.
* Real Estate & Property Management
It is important not to confuse the term ‘estate’ with the term ‘real estate.’ When people hear the phrase “estate planning,” they immediately conjure up images of opulent mansions with expansive courtyards.
In reality, your ‘estate’ consists of all of your assets, including your bank accounts, car, home, investments, and everything else you own. You’ll probably realize by now that you have some assets and possessions to consider in your estate planning.
* Will
One of the most common legal documents overused in Hollywood films, especially when a wealthy father dies and his spoiled, undeserving children turn to a family lawyer who dramatically reads the will.
And the wealth is left in the capable hands of a kind-hearted housemaid or butler, in true Hollywood style! Even though it makes for a good movie, it is infrequent in the real world.
On the other hand, A will accomplishes precisely what is shown in the film. It is a legal document that specifies how the deceased’s assets will be distributed. If there is no will, the assets will be divided in accordance with state law, which may not be equitable to the different family members involved.
When drafting a will, you’ll want to consult with an attorney because an executor will be appointed to carry out the terms of the will. Furthermore, the will must be legally recognized and enforced.
* Living trusts are a type of trust maintained throughout one’s life.
A living trust is typically established in order to prevent one’s assets from being subject to probate. This will make things easier for the family members, and the assets will not become public knowledge due to this.
What is the difference between a will and a living trust? The answer is straightforward if you’re wondering what the difference is.
A will only becomes effective after the person who made it (the testator) passes away. A living trust, on the other hand, takes effect immediately. A living trust is a legal arrangement in which a trustee manages an individual’s assets on behalf of a beneficiary.
Also seen in movies, where the wealthy father places an enormous sum of money in trust for his wayward son, with the money to be held until the boy reaches a certain age, is another common scenario.
* Authorization to act as a proxy
Having a power of attorney allows someone you trust to act on your behalf in matters such as financial or medical decisions. However, the person you choose does not have to be an attorney; however, they must be capable of making sound decisions regarding managing your financial assets.
* Medical directives with a long time horizon
An advanced medical directive is a legal document that allows a person to specify how they want to be treated if they become terminally ill or incapacitated in the event of a medical emergency. It is possible that they do not wish to extend their lives through artificial means.
Seniors frequently express a desire for dignity in their final days. Advanced medical directives will assist them in achieving this goal.
These are some of the most frequently encountered legal documents in estate planning. While this article is a general introduction to the subject, the actual content is far more technical.
You absolutely must consult with a professional when it comes to estate planning. In this day and age, scribbling your wishes on the back of a napkin will not suffice. Do your research and hire an experienced estate planner to assist you.
Estate planning will help you preserve your assets while you are still alive. It will also help you avoid a great deal of red tape in the future. There are many factors to consider, and an expert will guide you through the process. Take note: it will be best to hire a professional estate planner. A will is a legal document that specifies how the deceased’s assets will be distributed.
Living trusts are a type of trust maintained throughout one’s life. If there is no will, the assets will be divided following state law, which may not be equitable to family members. An advanced medical directive is a legal document that allows a person to specify how they want to be treated if they become terminally ill or incapacitated. Seniors frequently express a desire for dignity in their final days, and advanced medical directives will assist them in achieving this goal.
