An Estate Plan is a series of legally binding documents that outline the desires for yourself and your assets when you die. The purpose of an Estate Plan is to ensure that your estate (i.e. your properties and possessions) are distributed and managed how you intend after you die.
HOW TO PROTECT YOUR ASSETS
Estate planning is first and foremost about protecting the assets you acquire during your lifetime. Protecting your assets means both financially protecting them, and also protecting what your beneficiaries are able to do with them after your death.
If you are a real estate owner, you will want to consider creating a Trust in order to:
- Protect your assets in life and after death
- Provide legal protections for Trustees
- Aid in maintaining your real estate assets for future generations
How does a trust protect my assets?
You can include anything in a Trust that you want to be protected. When it comes to real estate, by including a property in a Trust, you are essentially transferring ownership of the property to your Trust. With the Trust in control, your property (and any other assets you include in the Trust), are protected from beneficiaries after your death.
HOW TO PLAN FOR TAXES
One benefit of Estate Planning is the opportunity to benefit from tax protections.
Here are a few things to know about taxes and estates:
- The more valuable an Estate, the more taxes it will be liable for.
- A Trust is a way for real estate owners to benefit from tax protections.
- Trusts and Wills are taxed differently. Seek legal advice to determine the best course of action for your estate to avoid unnecessary taxes.
- When you name beneficiaries of your Estate, consider how they will be affected by taxes surrounding their inheritance, and if they will be able to financially support being a beneficiary.
Consideration of the tax consequences surrounding your assets is a key component of proper estate planning. Planning for taxes will ensure your beneficiaries are properly equipped and prepared to handle the taxes that come with inheriting your estate.
HOW TO AVOID PROBATE
Yet another reason to put your Estate in a Trust: it will allow beneficiaries to avoid probate.
What is probate?
Probate is when beneficiaries have to go to court to settle an Estate. Additionally, if a Will or Trust does not name an executor, a court will be needed to appoint a representative of the estate.
What is probate?
- Seek legal counsel to determine whether you should set up a Trust or a Will
- Set Up a Trust or Will
- Name an executor in your Trust or Will
Avoiding probate saves countless fees, not to mention unnecessary costs from legal fees and taxes related to probate. Plus, you spare your relatives from the sometimes long process of probate by forming a clear plan prior to your death.
CREATE YOUR ESTATE PLAN
Creating an estate plan not only ensures the safety of your assets, but also eases financial stress on your loved ones if you die. Through a series of legal documents, you are able to clearly stipulate your wishes to the beneficiaries of your estate while you are still alive.
A legitimate estate plan will include four key elements:
- Last Will and Testament
- Living Will
- Power of Attorney
- Revocable Living Trust
Always be sure to seek legal and professional real estate counsel in the process of creating your Estate Plan. Estate planning is not a one size fits all, but with the right professionals helping you through the process, you will be able to create a plan that best protects your assets.
Estate planning is not morbid, but rather sound financial planning. Not only does estate planning allow you to protect your assets, it also provides your estate beneficiaries with a clear path forward should you become deceased.
With our help, you will be able to pass your legacy onto your family without unnecessary risk. Get in touch with us today to get started planning your estate!