Estate planning is one of the ways to ensure the distribution of assets per your wishes. When you write and declare a will, you ensure that your property and assets are protected and distributed among your legal heirs. Should you choose to leave a sum for a charity or assign a guardian for your business or kids, creating an estate plan is the safest and smoothest way to go about the process.
The complexity of the estate planning process depends upon the size and structure of your estate and your family and business dynamics. As each family has its circumstances, their estate planning varies greatly. However, there are some basic plans and rules that most people follow.
Wills
Wills are legal documents that instruct who will inherit your property, take care of your children, and manage your estate affairs after your death.
In the absence of a will, the state decides how to distribute your property and business according to the preset rules. It is commonly divided between your spouse and children while the beneficiary gets the life insurance. The no will approach leads to unnecessary legal actions and additional taxes. Wills reduce litigation, expenses, and tedious paperwork.
Trusts
Legal arrangements for setting up and protecting assets as per the owner’s demands are called trusts. Trusts are equally valid during the life and after the death of their creator.
Some people mix wills and trusts and assume they have protected themselves and their assets by creating a will. If the aim is the providence of long-term medical care and improved quality of life in old age, seniors need to create a trust for themselves. This allows them to appoint a trusted person to handle their financials and assets when they can’t do the same due to age, illness, or disability.
Plan your Asset Distribution
It is essential to discuss the distribution of assets and inheritance with your attorney before you lose the ability to make these important decisions for yourself. Wills and trusts ensure that your possessions are protected, your care is guaranteed, and your assets are divided in a manner you deem suitable.
