Most people are familiar with the estate planning mechanism known as the last will and testament, or simply will for short, but they may not be aware of another legal tool that can accomplish the same goals of caring for your loved ones when you’re gone. This legal document is known as a living trust.
The primary purpose of a business succession plan is to make sure that a company is prepared for any expected and unexpected changes in the future. Without a business succession plan in place, your company may not be prepared for potential transitions or any other forms of uncertainty.
Creating a well-detailed estate plan allows you to get your affairs in order, prepare for life's uncertainties, and protect your assets, property, investments, and surviving loved ones. If you're thinking about drafting your estate plan, here are some vital things to consider before you start.
Estate planning is more than simply drawing up a will. A comprehensive estate plan should include provisions on who will receive what assets as well as who will make important decisions on your behalf should you become incapacitated. Before you begin planning, you should educate yourself on some common estate planning terminology that you’ll encounter.
When you write a will, your general goal is to list what you own — cash, investments, homes, cars, art collections, etc — and leave those assets to specific people. Some people use a will to give certain assets to specific heirs, such as leaving a painting that a child loved to that child so that they can hang it in their own home.
If you’re a young parent, part of making your estate plan is picking a guardian for your child. If you pass away, this is the person who will take over raising that child.
People often don’t stop to think about whether they could qualify for Medicaid or not until they realize that they will soon need benefits. For older adults, who make up one of the primary populations served by Medicaid, a lifetime of savings might make it harder to qualify for benefits.
Many people are under the impression that estate planning isn’t important until later in life. While it’s your hope that your estate plan never comes into play when you’re young, there’s no way to predict the future.
When creating a will, you’re staffed with the responsibility of naming an executor. It’s easy to name the first person who comes to mind and then move on, but that won’t give you the peace of mind you deserve.
As more and more people move on to second and subsequent marriages — often with children from previous marriages — qualified terminable interest property (QTIP) trusts have become increasingly popular. They allow people to leave assets to their surviving spouse while ensuring that any children and other beneficiaries will eventually receive an inheritance as well.