Estate planning is NOT solely for individuals that are rich and/or own an abundance of properties. Quite literally, estate planning is for everyone, and regardless of your financial situation, there are certain assets that are in your name. No matter how many assets you own or how little, you have an estate.
You need to plan your estate properly, and for it to function in your best interest, you need to detail instructions that state the following:
- Who receives what in your estate.
- When they receive it.
Planning and providing these details in every aspect of your estate, everyone will receive exactly what you have in mind for them.
Instructions To Include In Your Estate Plan
- Words of wisdom and advice.
- You need to include final advice to every one of your family members. This advice could be anything; from telling your grandchildren the importance of a college education for telling your children to continue working hard.
- Estate planning is not just about passing along your wealth; it is also about passing along your values.
- The naming of a guardian as well as an inheritance manager for children that are minors.
- A method of providing for loved ones that have special needs without interfering with their government benefits.
- Insurance plans.
- Always include a life insurance policy as a way to help your family monetarily after your death.
- Take out a disability income insurance policy as a replacement for your income in the event that you cannot work because of an injury or illness.
- Put in place a care insurance policy that will help to pay for your disability in the event that you have a prolonged sickness and/or injury.
- A plan of action that will transfer the assets of your business to family members (or member if the case may be) of your choice after your death, disability, or even retirement.
As stated, (and as you can now see), creating an estate plan is for everyone. Unfortunately, many people do not create an estate plan until it is too late, and when something happens to individuals that have not created an estate plan, the state usually decides what to do with their assets; and for most families they are not pleased with the results.
If you do not have your own personal estate plan:
- Disability: If you cannot conduct business as usual as the result of a physical or mental condition, the court will have full control of your assets. They will decide how your assets will provide care for you by a conservatorship or a guardianship. This can become quite expensive not to mention time-consuming, it can be nearly impossible to end even if you recover.
- Death: In the event that you die without an estate plan, the state will distribute your assets according to probate laws in your state. In most states, if you are married and have children, both your spouse and each of your children will obtain a share of your estate. Unfortunately, the share your family receives is at the state’s discretion (and truthfully, the share they give them may not be enough for them to live on). For minor children, the court controls their inheritance. In the event that both parents die simultaneously, the court been appoints a guardian of their choosing without knowing which guardian you would choose. Therefore, your children’s future is solely in the hands of your state’s court.
Creating Your Estate Plan: Should I Choose a Will or Living Trust?
To begin creating your estate plan, you must first create a will or living trust. If you decide to create a will, realize that while it does indeed provide instructions for distributing your assets accordingly, it does not avoid probate. All assets that are titled in your name and/or directed in your will have to go through your states’ probate process before the assets can properly be distributed among your heirs. From state to state, this process will vary greatly. Unfortunately, due to legal fees, court costs, and executor fees the process can also become very expensive.
On the average, the entire probate process can take anywhere from nine months to two years and even longer. Additionally, probate files are also open to the public. Moreover, any family members that feel they deserve a portion (or larger portion) of your assets have the ability to come forward and ask for share of your estate.
Who Controls The Entire Process
Due to all of the headache and “red tape” that a will entails, many families prefer to use a revocable living trust. By going this route, a revocable living trust will avoid probate at the time of your death. Additionally, a revocable living trust can also prevent complete control of your assets in the event that you are incapacitated; if you need to bring together all of your assets into one plan while at the same time ensuring maximum privacy and the ability to change your plan at any time.
The trust will also not die with you. If your assets are supposed to go to a minor, they will remain in your trust until they reach the age you wanted to inherit your assets. Additionally, your trust can also carry on long after your passing as a way of providing for loved ones with special needs. It can also protect your assets from a beneficiaries’ creditors as well as family members that are irresponsible.
Organize and Update Your Asset’s Records
If you passed on tomorrow, would your family know where your titles, insurance policies, and financial records are stored? More than likely they would not, yet even if they did these records may have errors on them.
By planning your estate now, you have the luxury of finding your records, locating titles, and analyzing them to discover whether or not any of them have errors on them. In short, estate planning helps you to ensure that every detail regarding your assets is accurate.
Additionally, you need to ensure that you are constantly revising and changing your estate plan as your family and financial income changes. In short, estate planning should never be a one-time event!
Is Estate Planning is Expensive?
Can’t afford to plan your estate? Start with what is affordable to you. For example, if you’re a single adult or have a young family, begin by writing a will, purchasing term life insurance, and obtaining a power of attorney for your assets along with decisions pertaining to healthcare.
As your needs begin the change in the state of your financial situation begins to improve, develop your plan further by obtaining the help of an attorney. They will be able to guide you through the entire process so you can know that all of your documents are properly prepared.
Begin Planning Today
The best time to begin is now. It may sound cliché, but none of us knows what tomorrow holds for us. In the near future, we may very well be deceased or unable to make decisions for not only our family, but also ourselves. Too many families find themselves unprepared when the unthinkable happens, and unfortunately, during the period of their grief they are forced to decide what will become of your estate as a whole.
Don’t let this happen to your family. No matter your age or financial situation, at least create a plan of action that will divide your assets accordingly. By doing so, you will have the peace of mind to know that no matter what happens to you in the future; your family is going to be taking care of accordingly.
Please contact your Assisted Living Services Of Florida advisor immediately to get FREE dedicated help for you and your loved one to get established in the most timely and efficient manner.