Protecting one’s wealth is one of the most important priorities every person has in the modern world. Let’s say you come up with an effective estate plan. In order to protect it, you must implement efficient estate planning tools. These tools will offer you the necessary knowledge to protect your estate plans.
You need to have a will. It should be updated regularly. A will is a document that has been legally drafted by a lawyer or an attorney. This document states when, how, and to whom all the assets you possess will be given in case you die. Make sure your will is simple. Several items should be taken into consideration when making a will include:
- Specify the beneficiaries, including the specific bequests.
- Mention who the legal guardian will be for underage children.
- State the executor of the will.
- List the assets to be distributed immediately and those to be placed into trusts.
- Mention any charities or organizations you want to benefit from the will.
A trust will help in achieving more specific and complex financial targets that you might have. This is a legal arrangement that specifies how the distribution of any asset will be managed (property or cash). Transferring assets to a trust can be done when someone is still alive. Or, you can state them in your will. Trusts have many merits; they allow the fast transfer of properties to the beneficiaries with no cost or delays, they offer ongoing income to the beneficiaries, they cut down the estate taxes, and they are advantageous to favorite charities.
Power of Attorney
Draft the power of attorney carefully since they offer a person the legal authority to make any decision on your behalf in case you are disabled or incapacitated. These legal powers will dictate decisions regarding your health and financial affairs. We have two main types of powers of attorney:
- Financial: This one governs all the decisions related to your assets and financial affairs.
- Health Care: This gives a guide on all decisions being made that are related to your health with regards to care and treatment. In case of incapacitation and there being no power of attorneys, a court will appoint a conservator or guardian. Most of the time, he or she will not embrace your values or personal priorities.
Having life insurance is useful since it achieves what the other planning tools cannot. It offers an immediate income source that is tax-free. It’s a good way of making sure your family still enjoys financial stability even when you are gone. They will not need to liquidate any assets.
A Living Will
Sometimes known as the advanced directive, it states the desired treatment of an individual in case he or she gets incapacitated. It will also give clear guidelines on how any last wishes should be fulfilled. The above tools will make sure that your assets and beneficiaries are well-guarded by law. Before using these tools, it’s best to do some research and legal consultation before you make a decision on how to use the above tools. Any mistake can prove to be deadly.
Call our Estate team at (480)467-4325 to discuss your case today.
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