Protecting your estate involves a comprehensive approach to better ensure that your assets are managed and distributed according to your wishes, medical decisions are made in accordance with your preferences and your finances are handled efficiently. The only way to do this in ways that are truly enforceable is to get everything in writing.
A comprehensive estate plan is the key to making sure your wishes are known and that your loved ones have the ability to follow them.
How can you pass down assets?
For passing down assets, crafting a will is a fundamental step for anyone who doesn’t prefer to utilize a trust for this purpose. A will is a legal document that outlines how you want your assets to be distributed after your death. Without a will or trust in place, state laws will dictate the distribution of your assets, which might not reflect your wishes.
You may also want to consider establishing a trust to provide you with even more control. Trusts offer various benefits, including potentially reducing estate taxes and providing for your beneficiaries in a manner that aligns with your specific intentions. Certain kinds of trusts can also protect your assets from creditors and better ensure privacy because they aren’t part of the public record.
How can you make your healthcare wishes known?
When making medical decisions, having an advance directive is crucial. This includes creating a living will and designating a healthcare power of attorney. A living will outline your wishes for medical treatment if you cannot communicate them yourself. A healthcare power of attorney appoints someone to make healthcare decisions on your behalf in the event of incapacitation. These tools help to ensure that your medical preferences are respected, even when you can’t articulate them.
What financial planning should you take care of?
Taking care of finances is also an important concern when it comes to estate protection. This encompasses a range of activities, from ensuring your estate has sufficient liquidity to cover debts and taxes to strategically planning for the potential impact of estate and inheritance taxes. Financial planning might also involve setting up payable-on-death accounts, which allow the funds to bypass the probate process and directly transfer to a named beneficiary.
Finally, you’ll want to keep in mind that estate planning is not a one-time event but an ongoing process. Reviewing and updating your estate plan regularly is essential, especially after significant life events like marriage, divorce, the birth of a child or significant changes in your financial situation.
