Estate planning ensures your wishes are honored when you pass away, become incapacitated, or incur a disability. If you die, your assets will be given to the people that you’ve chosen. It also helps you make sure that someone you love and trust can make healthcare decisions for you if you can’t make them for yourself.
Without estate planning, the court might have to appoint a conservator or guardian to make personal care decisions and manage your finances. The downside is that the appointed people may not manage your assets and take care of you as you wish. So, you would want to avoid that for your own good, for your assets, and for your family.
For effective estate planning, it is best to hire wealth management firms that will help you navigate the entire process with ease. But, before hiring one and getting through with estate planning processes, here are some effective tips that you’d want to consider.
Hire A Team Of Experts
It’s crucial to hire a team of experienced professionals to guide and advise you while creating your estate plan. Some of the experts that you can hire include the following:
- Tax professionals: They will bring all their knowledge and insight on taxes to help you create a proper estate plan.
- Financial advisor: They will analyze your financial records and situation to help you retain control over your assets. They’ll also guide you on saving strategies with your beneficiaries in mind. Aside from that, a financial advisor actualizes your asset distribution plan after your demise.
- Estate planning attorney: These professionals can help you do the following:
- Identify your beneficiaries
- Prepare a will
- Determine and select the best trusts
- Create a long-term healthcare plan
These professionals will help you customize an estate plan suitable for you and your dependents. Most firms, like The McGowan Group, employ all these talents that will simplify things for you. Hence, the chances of getting unexpected expenses like unplanned tax burdens will be meager. Moreover, you’ll have an assurance that your assets will be distributed appropriately to your beneficiaries of choice.
Ensure You Have A Well-Laid Out Business Succession Plan
If you’re a business owner, it’s essential to have a detailed succession plan, especially if you want your business to survive the next and even third generation of owners. Unfortunately, many businesses collapse, or the revenue diminishes once the founder dies. It’s usually a result of poor management by the successors.
In this regard, it’s crucial to have a succession plan with the following details:
- A designation of the next general manager of your business
- A list of individuals mandated to run it
- A date or period when to implement the stipulated changes
When choosing who to take over and run the business, it’s essential to consult and get consent from them before making a final decision. And, if none of your loved ones wants to run the business, you may consider selling the business after you retire or pass away.
Try And Include All Your Wishes In The Relevant Documents
You need to be thorough when filing estate planning documents. Try and state all your wishes, including your beneficiaries, beforehand. If you fail to stipulate your desires explicitly regarding your assets, the judge may choose a conservator to make critical decisions for you at the probate court.
So, to reduce the risks of someone else making decisions regarding your assets, it’s essential to include the following in your estate planning documents:
- Healthcare directives: This contains two documents—the healthcare power of attorney and a living will. It’s a legal document that specifies your preferred healthcare services and treatment.
- A medical care directive: This document has specifications of the healthcare treatments you prefer and those that you don’t as you come toward the end of your life’s journey.
- The medical power of attorney: This document allows you to choose someone to make healthcare decisions on your behalf in case you’re not in the capacity to do so.
- Testament: It’s also known as the last will. In this document, you can include how you’d want your possessions to be handled after your demise. Other things to specify include the following:
- Your beneficiaries or dependents
- The assets you’ve allotted each of them
- Your funeral wishes
- Gift allocations
- Your will’s executor
Many people tend to confuse a will and an estate plan. But those are two different documents. A will is part of the estate plan, together with several other documents. It contains a detailed plan of who your successors are and how they will distribute your assets after your demise.
- Durable financial power of attorney: Through this document, you can appoint an agent to help you manage your finances in case you become incapacitated.
After preparing all the estate planning documents mentioned above, the chances of your beneficiaries experiencing issues after your demise will be minimal.
- Don’t Forget To Specify The Guardians For Your Dependents
Lastly, make sure you name the guardian you’d like to care for your dependents following your death, especially if they are:
- Minors
- Aging parents
- A family member with special needs
Failure to appoint the guardian may coerce the judge to do it on your behalf, and their choice may not be best for your dependents. So, it’s best to do it early on.
Don’t forget to talk to the guardian beforehand, discuss the issue, and ask for their consent. Once they’ve agreed, you can appoint them to manage your kid’s inheritance if they’re still young. And when they’re of age, they can take over the management of their assets.
You may want to name a second guardian to act as backup, just in case the first one is unable to care for your dependents.
Conclusion
Estate planning enables you to protect your assets and ensure your loved ones are taken care of upon your demise. Being proactive regarding your wealth is critical. So, don’t wait until you’re too old or on your deathbed to start preparing your estate plan.
Death may come when we least expect it, and you leave this world before setting your assets and loved ones in order. That may bring disagreements and extensive legal dilemmas among your family. So, start estate planning as early as possible, and consult professionals on how to do it best.
