Draft your estate plan
by Admin
Posted on 02-03-2024 11:57 AM
A will or a trust may sound complicated or expensive—something only rich people have. That is an incorrect assessment.
A will or trust should be one of the main components of every estate plan, even if you don't have substantial assets. Wills ensure property is distributed according to an individual's wishes (if drafted according to state laws). Some trusts help limit estate taxes or legal challenges. However, simply having a will or trust isn't enough. The wording of the document is critically important. A will or trust should be written in a manner consistent with how you've bequeathed the assets that pass outside of the will.
Once your estate plan is drafted and signed, the revocable living trust must be funded in order to work properly. “funding” is essentially the process of transferring assets into your trust. An estate planning attorney will generally record a grant deed, signed by you. This transfers your real property into the trust. For bank accounts, brokerage accounts, mutual funds, etc. , you should bring a signed copy of the trust, or a shortened version of the trust (called a “certification of trust”) to the entity and ask them to retitle the accounts into the trust. Other steps may need to be taken to transfer more complicated assets, such as llc interests and timeshare holdings, into the trust.
Put your estate plan into action
Before you begin to take action on your estate plan, it's important to understand the key topics that may arise as you address your specific needs.
Should you not have basic estate planning documents in place—and in a location where your loved ones or those you trust can find them—your estate will go through probate, no matter how big or small. “without an estate plan, every state has a plan for you, but rarely is it a plan you want to implement,” says knighton. If you pass away intestate—that means without a will—things get messy. The state takes over and decides everything, from where your assets go to who gets custody of your children. The process can be slow and grueling for your loved ones.
Hardly a week goes by without news of a celebrity who died without a will, fracturing families and enriching their attorneys. Maybe you’re smarter than that. You have a will and have named a power of attorney for finances and health care. But unless you regularly update these documents and beneficiary designations, your heirs could still find themselves in a legal morass after you die or paying more than they had to in taxes (we’ll cover that, too). Worse, some of your assets could end up going to a wrongful heir. The basic components of an estate plan include a will or living trust (or both), a living will, and a power of attorney for finances and health care (also known as a health care proxy).
Common estate planning documents are wills, trusts, powers of attorney, and living wills. Everyone can benefit from having a will, no matter how small their estate or simple their wishes. Online estate planning services offer basic packages for less than $200. Estate planning attorneys can cost several hundred dollars per hour. Estate plans must be updated after significant life events.