The Basics of Estate Planning
Would you like to spare your family financial woes after your passing? Estate planning is the answer. It ensures that your financial wishes will be respected upon your death. Additionally, there will be a smooth distribution of your estate among beneficiaries. Below is a list of four key documents that everyone should include in their estate planning.
Insurance
Getting insurance cover secures the financial future of your beneficiaries. Life insurance cushions your loved ones from liabilities and financial burdens. These include large debts and taxes.
Accidental death auto insurance pays for death expenses under covered accidents. Without this insurance cover, your family will have to pay for death expenses out of pocket. Some life insurance plans also cover these.
Beneficiary Designations
Some assets are automatically transferable to beneficiaries upon your death. These include:
- Bank accounts
- Real Estate
- Motor vehicles
The beneficiary designation requires regular updates so that only intended beneficiaries can collect.
Last Will and Testament
The last will guide the executor on how to distribute property upon the principal’s death. It covers property that is not governed by a beneficiary. And the last will exclude joint ownership of property. Additionally, the last will direct guardianship for minor children. Upon your death, your beneficiaries must attend probate court to collect any disbursements.
Create a Living Trust
A living trust is a fiduciary agreement that entrusts property to a grantor. It was created during the owner’s lifetime. The trust guides the grantor on how to dispose of the estate upon the owner’s death. This is a good way to bypass probate court and cut estate taxes. Laws for creating a trust vary by state. When embarking on estate planning Orlando-based, it’s best to hire an attorney to advise you accordingly.
Estate planning directs financial and medical actions to be executed upon your death. It allows the peaceful distribution of assets to beneficiaries. Also, when planned strategically, estate planning saves time and cost of allocation of property.
