Many people assume that estate planning is only for the wealthy, but that’s not the case. No matter the size of your asset, you need to do some planning to make your life much easier in the long run.
You might associate a will with an estate plan, but they are not entirely the same. A will is a document that states the distribution of assets after someone’s death.
Whereas an estate plan includes more than a will, such as health care power of attorney, beneficiary designations, wishes, and guardianship designations.
Estate planning is vital for everyone as it avoids legal tie-ups and taxes and ensures that funds are distributed according to your wishes.
Let’s talk about the top tips to help you create a perfect plan.
Work with Professionals
You need to work with professionals to create a perfect plan to meet your expectations. Create a team for this purpose that should include a tax professional, financial advisor, and Estate Planning attorney. They can help create a plan that is specially customized for you.
When you start the process early, you get more time to think about asset distribution. This way, you make yourself more confident with your choices.
Understand Components of Your Plan
A complete estate plan should portray your wishes properly so that you can control most of your life situations. Make sure it includes the following details:
- Financial power of attorney allows you to assign a person to make financial decisions in situations you are unable to.
- Healthcare power of attorney lets you assign the person to make health decisions for you when you can’t make it yourself.
- Testament allows you to distribute your assets and appoint guardians for minor children.
- A living will provide information about what treatments you do and do not if you cannot take a stand for yourself.
Properly Structured Trust
You can decide which assets you include in your trusts and how it is distributed to your heirs. It can help assure that you are following your plans and wishes.
Work with an attorney specializing in estate planning to get the most appropriate trust structured for you.
Set up Guardianship
If you don’t name a guardian for minor children or someone with special needs in your family, then the judge will appoint one. So it is best to plan it beforehand and according to your wish.
Before you finalize the guardian’s name, get their consent on the matter. Consult with your attorney on what things you have to consider. Remember that your child’s guardian does not have to manage the money left behind by you.
Consider the Future of Your Business
You need to plan what will happen to your business after you die. Have your successions in plan with effective estate planning.
Ensure that your will clearly states whom you will entrust to handle your business processes. Before you choose a successor, make sure to have a serious conversation. If you hand it over to an irresponsible person, it could be driven to bankruptcy.