It’s hard to predict the future. Take the COVID-19 crisis, for example. Few people would have imagined having to spend months in a self-quarantine, or having to practice social distancing while wearing a mask in order to speak with someone safely.
Deciding what happens to your assets ahead of time is therefore an important process. It eliminates future problems by answering questions about your desires ahead of time.
What Is Estate Planning?
Developing an estate plan consists of determining what happens to your assets should you become incapacitated or pass away.
Estate planning is your opportunity to preserve, manage, and distribute your assets in the way that you choose. The main document used in this process is your will.
Some individuals will also use a living trust. To learn more, or to set up your own estate plans, you will need the assistance of an estate planning attorney.
Living Trusts
There are two types of living trusts:
- Irrevocable living trusts cannot be changed. It’s made for the sole purpose of facilitating tax and asset protection.
- Revocable living trusts are a form of protection if anything happens to you, such as disability, illness, or the natural symptoms of aging. You may be able to make amendments or even revoke your trust altogether whenever you choose. Keep in mind that you cannot avoid estate taxes with revocable living trusts because they permit you to modify or annul them and are, therefore, still incorporated in your assets.
When a person passes away, it must be verified that the executor of that person’s will is the true representative of the person’s assets. To do this, the will must go through a probate court process for verification. Probate fees can be high, but it varies according to your assets. Living trusts can help people to avoid probate.
Some attorneys view living trusts as having value. Our estate planning services can provide more information.
Power of Attorney
Estate planning allows you to appoint a power of attorney to one or several people, so they may carry out decisions on your behalf according to your documented wishes. The power can be temporary or permanent, and it can pertain to a single activity or the overall proceedings.
The Benefits of Designing an Estate Plan
Knowing that your family will be taken care of if anything happens to you will give you peace of mind. They won’t have to second-guess what it is you would have wanted or fight over which family members get to run the business. Having a layout of your assets and beneficiaries in place can prevent fights and keep your loved ones together.
As part of your estate plan, you will be able to ensure who takes care of your children. Your Last Will and Testament will be used at this stage, preventing the courts from stepping in. Additionally, smart planning can ensure that your family won’t have to deal with high taxes on the federal and state levels.
Need An Estate Plan?
TPI Group can assist you with making financial decisions regarding your assets. A TPI estate planner will walk you through the process. We can discuss the role of life insurance, lifetime gifts, as well as what to do with your real estate.
Contact us today to get started!