An estate is comprised of everything that you own (properties, cars, boats, bank accounts, investments, insurance policies, furniture – everything)! No matter the size, everyone has an estate and something in common: you can’t take it with you when you die.
It’s possible to plan, organize, and protect the assets that have been accumulated throughout your life so that after death, all is well conducted according to your will. And this is not a caution taken only with wealthy families and large companies. Even if you have only one property or anything that you consider valuable, it should be protected so that at the time of death, sharing is not torn by family conflicts.
Will vs. Trusts
Many solutions can be designed to protect assets. Preparing a will is the simplest, cheapest, and most common form of estate planning. Responsibilities can be created for the heirs to fulfill. A will provides your instructions, meaning you get to decide who gets what from your estate. Jointly owned property and assets that allowed you name a beneficiary (IRAs, 401(k)s, annuities, etc.) are not managed by your will and usually transfer to the new owner or beneficiary without probate.
Another estate planning option is to create a revocable living trust. Trusts can help avoid probate at death, prevent court control of assets at incapacity, bring all of your assets together into one plan, are valid in every state, and can be changed by you at any time.
Differently from a will, a trust doesn’t die with you. Assets can stay in your trust, managed by a trustee(s) you select until your beneficiaries reach the age you want them to receive their inheritance, for example. Initially, a living trust can cost more than a will, but contemplating it can avoid court interference at incapacity and death, so many people find it to be a bargain.
Estate Planning is for everybody
Estate Planning isn’t just for retired individuals, though people do begin to think more about it as they get older. Sadly, we can’t predict how long we will live, especially when illness and accidents can happen to people of all ages. Estate planning is not just for ‘the rich’ either. People who have built some wealth do think of ways to preserve what they have made.
Many people delay their estate planning because they think they don’t have enough assets or that they are not old enough. The truth is, if you plan for it, then your state will prepare it for you, but you probably won’t like it.
The best time to plan your estate is now
None of us really likes to think about our own mortality or the possibility of being unable to make decisions for ourselves. This is why many families are caught off-guard and are unprepared when incapacity or death does strike. Don’t wait. You can put something in place now and change it later…which is the way estate planning should be done.
The best benefit of estate planning? Peace of mind. To know that you have prepared a plan to protect your family will give you and your family peace of mind. This is one of the most thoughtful and considerate things you can do for yourself and for those you love.