Estate Planning: 5 Financial Tips and Tricks
Tuesday, March 24, 2020, 6:00 AM | Leave Comment
More than 50% of all adults in the U.S. don’t have a will. The lack of a will can cause several problems for families when a relative passes away.
For instance, if both of a child’s parents die in an accident, the child’s fate could be left up to a judge.
Assets and property in a blended family may not be distributed according to the desires of the deceased or the surviving relatives.
Estate planning services can also be necessary for individuals who are alive but incapacitated so that the designated family members can provide directions concerning medical care.
If you don’t already have an estate plan, it’s important to create one right away. Estate plans are legal strategies that how money and assets should be distributed in the event of your death.
Here are a few important suggestions to remember.
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Create and Edit Your Will
A will dictates where and how your assets will be distributed if the assets are not designated in a trust or don’t have beneficiaries. This can include your home, automobiles, bank accounts, and personal valuables. You should have a will in place to cut down on familial disagreements when you pass away.
When you get remarried, you’ll become part of a blended family if you and/or your spouse have children from previous relationships. Make sure you may your new spouse the executor of your estate if you want him/her to handle your affairs when or if you’re unable to do so. If you have new step-children that you wish to include among your heirs, your legal documents should be updated to reflect this.
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Be Sure to Choose an Executor
When you create a will, you should select a person to carry out your request. If you have a simple estate, you can ask a family member or friend to handle it for you with the assistance of an estate lawyer. If you have a complex estate, it’s best to hire a professional management company as the executor.
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Put a Living Trust in Place
A living trust exists for two reasons: it lets you pass your assets to relatives without going to probate court and it allows another individual to handle your affairs if you’re able to do so. Your trust can own your bank accounts, cars, homes, and other valuable assets. You are the trustee but you can also assign a successor trustee who will assume responsibility if you become incapacitated or pass away. A trust is essential for estate planning because it makes your wishes clear while you’re living and gives your relatives a guideline for family wealth when you die.
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Consider How You’re Holding Assets
Think about how you hold assets. In many cases, joint assets will automatically pass to the surviving spouse. However, other important assets may not, so if you hold the title to valuable possessions, homes and bank accounts, write your will in a way that will benefit both you and your spouse.
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Talk to a Financial Advisor
If you’re not familiar with creating a will or trust, it’s a good idea to speak with a financial advisor. The advisor will let you know which factors to include in your will or living trust, such as: who your beneficiaries should be, who should be the executor of the will, and which assets and property you want to leave to your loved ones.
You can use free online tools that will match you with the best financial advisors in your area. You’ll get the results in a matter of minutes. Financial advisors who have been vetted by professional institutions are legally bound to provide information and suggestions that appeal to your best interests.
Even when your estate plan is complete, review and edit it every now and then based on major life changes. Ideally, everyone should go over the details of their estate planning every five years.
It’s also crucial to evaluate your estate plan if the heirs of the estate have remarried or passed away, or if the executor you’ve selected for the will is no longer able to carry out these duties.
Remember that you should also review your estate plan when you get divorced or remarried. Keeping these important factors in mind can simplify estate planning and maintenance.
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