ESTATE PLANNING BASICS
What Is An Estate Plan and Why Do You Need It?
There are a lot of misconceptions about Estate Planning. Many people think that you have to have a large value of assets or a lot of land to benefit from estate planning. And many people think that they only need a simple will because they don’t have enough assets. But the truth is, most people would benefit from having an Estate Plan.
Why? Some of the main concerns people have about the assets and loved ones you leave behind are who will make sure all of your belongings, property, and other assets are divided up as you wish, who will care for minor children, and who will take care of you if you are incapable of making your own decisions. If these things, among others, aren’t addressed before you pass on, it can create a headache for your loved ones, during an already stressful time in their lives.
The Will is generally the cornerstone document of your Estate Plan. That is where you will answer the questions below and designate the people you want to handle your affairs and direct them as to how things should be handled after your passing.
Who Will Take Care of Your Estate (Executor)?
Family dynamics can be complicated, and they can cause unnecessary expenses and time delays to the administration of your estate. Many times, people are best choosing either an independent representative or a family member that is a little bit removed (such as an aunt or uncle or in some cases even a sibling) rather than a child as the executor. If you have only one child, that may be a fine decision. However, if you have more than one child, not only is your child dealing with the loss of a parent or parents, but now one of them may feel slighted that they were not chosen as the executor.
Who Will Take Care of Your Children (Guardian)?
Although there may still be requirements for a proceeding so the guardians may be appointed by the court, a will can designate who you want to care for your children in the event that both parents are no longer around to care for them. If one parent is still alive, the default is that the surviving parents cares for the child(ren). You can even specify if you want visitation with any family members, if you want them to be raised in a certain religion, and any other aspects of raising your children that are important for your chosen guardian(s) to carryout.
Do You Want to Give Specific Gifts?
The best way to handle specific gifts to family members or friends, is to discuss what means the most to each of them and make a detailed list of what items you want each person to have (and where that item is located) after your passing. You also want to consider whether the gift should constitute part of the value of the remainder of your estate that they are entitled to based on additional provisions in your will. This list should be included with your will and other estate planning documents. Once you have a will in place that allows you to specify what items you want to gift to whom, you may change these gifts at any time with a new list that you sign and date.
Do You Need a Trust?
If you have children, you have probably thought about a will. Or maybe you even have one to choose the guardian for them. However, have you thought about what happens to the assets they stand to inherit after you're gone? In some cases, the assets you leave them aren’t as protected as you think.