Having a legal will in place can help your family and friends understand how you wish your estate to be handled after your passing. You can use your will to designate a personal representative to handle the probate process, clarify your wishes regarding the distribution of your assets and name your beneficiaries.
That’s a lot for one legal document. After you’re done drafting your will, you may believe that there’s nothing left for you to do. But, there’s a lot more you can do with an estate plan. Here are a few things you may want to consider:
Creating a trust can provide security for your heirs
A will can give you some security in knowing your assets will be in good hands after you pass away. However, a will is susceptible to probate and estate taxes, and inheritances can be lost through poor financial decisions and other life events. Plus, probate is a long process that requires the court to verify your will and make sure your personal representative handles their duties. This process can take up to a year and could be disputed by someone who believes they have been wronged.
To avoid these issues, you could create a trust. A trust is a legal vehicle that can remove assets from your estate and bypass the probate process. They offer a more secure way to protect the assets you leave behind because they typically cannot be attached by creditors. This can help preserve the generational wealth that you hope to pass on.
Powers of attorney can protect you prior to your passing
You could also use your estate plan to direct how your financial and medical issues are handled if you become incapacitated prior to your death for any reason through the designation of powers of attorney who can act on your behalf during an emergency. For example, if you’re in an accident and left unconscious. the person with your medical power of attorney can direct your health care and the person with your financial power of attorney can make sure that your bills are paid.
Estate planning is a complex process with a lot of moving parts. By understanding your legal options, you can learn about all the different things you can add to your estate plans so that they work for you the way that you want.