There are so many myths that are associated with estate planning. Many believe you must be wealthy or have sizable assets to make an estate plan. But that’s not the case indeed.
Some assume that estate planning is about drafting a will and opening trusts. It should not be so, as this planning casts a broader net including but not limited to the financial power of attorney, trusts, medical power of attorney, and wills. This article will explain why you should be particular about drafting an estate plan and any documents associated with this during a crisis.
An estate plan becomes crucial when you are old or ill, as it will protect your family and communicate your wishes concerning asset division and care. So, book a consultation with lawyers at The Hive Law consultancy to start the estate planning process.
Most people do not have money lying in the bank waiting to be collected. The money could be invested in real estate, cryptocurrency, NFTs, or metaverse. It is essential to consider such wealth to ensure none is lost. Real estate assets will require you to provide originals and copies of title deeds and leases. For cryptocurrency, you must be willing to include information on crypto accounts, wallets, instructions on how to access them, and their respective passwords.
Every family has issues to solve, but particular ones cannot agree on the fundamental issues. It is not just the apparent sibling rivalry seen when growing up but extends the spectrum to extended families or illegitimate children.
To ensure the assets don’t become another bone of contention, choose estate planning as your go-to solution. The disagreements over which assets go to whom will be easy to solve in a law court.
Let’s be honest; the unexpected pandemic did throw many families into trouble when members had to make life-altering decisions. Some saw their parents and partner suffer at death’s door, and others lost their breadwinners. And to make matters worse, most did not leave clear instructions about their assets.
Even in cases of incapacitation, an estate plan gives clear instructions about your wishes during such periods. It is necessary to have someone you trust with a medical power of attorney to ensure your interests are met. They might not even be a family member; your family doctor can take over this role too.
It is no wonder that upon death, one’s assets have been acquired by the government since there was no one to claim them. It is the worst possible scenario.
An estate plan gives you control over who claims your asset. It will allow you to insure your children’s future through trust funds that mature when they are of legal age. It will also allow you to include non-relative members, such as long-time friends in the inheritance plan.
If your assets are of high value, you will likely face federal tax from the direct assets and the profits accumulated over time. You can mitigate this by carefully assigning assets to a trust to avoid probate and state taxes.
If you have assets in a bank, you must assign beneficiaries to the assets to mitigate taxation.
You will be surprised to learn that drafting an estate plan is not as expensive as you thought. Most plans only include wills and trusts, which are the basics. Even with hiring a professional to assist you, the range is still affordable for the everyday citizen.
Depending on the contents of your estate plan, the rates for the plan should be between $500 and $2500. The highest will involve specific details regarding life insurance and health insurance policies, guardianship of assets, and much more.
You need to prepare these documents when starting the estate planning process.
This document will require you to name a list of all your assets and quantify which assets go to whom. You must include their contacts and current addresses for accessibility by the executor upon death.
In the document, you must name all living things in your care that you consider of value and assign guardians to them. It will include your underage children, pets, and plants. Most importantly, it would help if you named the candidate to execute all your wishes. It can be your family lawyer, friend, or a trusted family member.
It should include your insurance policies, including car, home, life, and health insurance. You must also include your credit and debit cards, mortgages, and other loans and explicitly provide information for each.
You must also include passwords and codes to any safes.
Deeds of Property
Includes title deeds or leases to land, rental possessions, and homes. Ensure that if you put in a trust for someone, you appropriately change the name to the person you have listed.
Give information necessary for your social media accounts, providing directives on what should be done to them. Also, give information on subscriptions you made electronically, digital financial accounts, and, importantly, access to your google drive and essential files belonging to you.
Medical and Financial Power of Attorney
Prepare a living will that directs your healthcare preferences and direct an administrator when needed. Assigning an administrator over your finances in power of attorney is paramount.
Give originals and copies of your birth certificate, national ID, passport, marriage certificate, prenups, divorce certificates, and social security card.
Having an estate plan is not a death wish, as some might say, but a plan to ensure your interests are protected at every point. Estate planning, especially during a crisis, will give you peace of mind over who inherits your assets and who doesn’t.