Chances are you don’t spend a lot of time thinking about end of life planning, but it’s a responsible part of adulthood. Even if it’s difficult to start, estate planning can have make a big picture impact for your family and friends down the line. A little knowledge goes a long way and can make the whole process easier. Here are some things to know about estate planning.
- Probate: This describes the process a court will use to settle and distribute a person’s assets after death. Probate processes can cost 10 percent of the value of all the deceased’s assets (the estate) and can take years to complete. This can be very stressful for family members, and having a will established can help make navigating the probate process much easier.
- Will: Having a will doesn’t mean avoiding the probate process, but it does assist in the process. A will can serve as a guide for the courts and executor (the person chosen to act on the behalf of the estate) to follow.
- Beneficiaries: Beneficiaries are named in your will or in specific ownership documents so that the court knows who can claim ownership after the original owner’s death. Retirement and insurance plans are common documents that need to have beneficiaries declared. Many other things allow for beneficiaries, such as bank accounts and other financial assets.
- Revocable Trust: This can help name beneficiaries for larger or more complicated assets, like a home or car. A trust is a separate entity that “owns” the assets and makes transitions to new owners easier. Most things placed in a revocable (or living) trust avoid the probate process and anyone named as the trustee controls the trust.
- Power of Attorney: There are usually two kinds of Power of Attorney that estate planning might involve. A financial POA is the person chosen to handle financial matters if an individual is physically or mentally unable to do so, and the POA is able to access accounts to help pay for bills and expenses. A medical POA Is named as the person to help make medical decisions if the individual is unable to. Preparing for these possibilities and ensuring POA is in place is an important part of estate planning.
These estate planning basics can help you get started thinking the future, but we’re here to answer all your questions. Get in touch today to start planning and gaining peace of mind.