Estate planning allows you to decide how you would want your property managed or divided once you die. Below is a guide on the estate planning process.
An estate lawyer will guide you through the planning process. Your choice of lawyer must be experienced and professional. In addition, they must be a people person becaise estate planning is a long process. As such, you will regularly interact with the lawyer.
The will is probably the most critical aspect of the estate planning process. When writing your will, you will need to consider the following:
- What do you own? You can only include assets or things registered in your name. If you co-own an asset with someone, you can only transfer your share of the asset. Think about sentimental items such as heirlooms, paintings, books and photo albums.
- Whom would you want to include in the will? You are free to add anyone in the will.
Your will must meet the minimum legal requirements; for example, you must be older than 18 years old and of sound mind. In addition, the legal documents must be signed by at least two witnesses. The executor is an individual that files probate, pays your debts, and divides property among the beneficiaries. Preferably, the will should have at least two executors. The second executor takes charge if the primary executor relinquishes his or her duty.
Trusts will enable you to protect the inheritance of young children and incapacitated beneficiaries. Typically, you will transfer assets to a third party (a trustee) who will manage the wealth on behalf of the beneficiaries. Choose a trust that meets the needs of your beneficiaries. For example, a trustee will manage a discretionary trust. It is ideal if your spouse can manage the trust on behalf of your children. In a unit trust, each beneficiary has a specific number of shares in the trust. Charity trusts are the best way to donate part of your wealth to charity.
The trust deed is a document that details how the trust will be managed. For instance, when should beneficiaries receive benefits? The trust should also have a secondary trustee and an appointer. The appointer is an individual that monitors the work of the trustee. He or she can fire the trustee if he or she mismanages the trust.
When estate planning, work with an experienced will and estate lawyer, write your will, choose an executor and create trusts to take care of young beneficiaries.