Estate Planning: What You Need to Know
Planning for what happens to your assets when you are gone is a difficult decision, but something that people eventually need to do. You may have started thinking about this but aren’t sure where to start. Even if you know about other areas of law, such as workers comp, there are things that are unique to estates. Knowing the basics about estate planning will help you make better decisions and be more prepared. Read more to learn about what you need to know about planning an estate.
One of the first things you should understand is the role the court will place in the process. Probate is the process by which a court settles the estate of the deceased. No matter how large or small your estate is, it may go to probate. The time it takes to distribute the estate varies by state, but it can take up to years. Cost also varies, but on average it can cost 10% of the estate’s value. The more you put into estate planning, the easier it will be for your beneficiaries to handle probate. You may even be able to avoid it.
Having a will
A valid will doesn’t mean you will avoid the probate process. However, it can make things much easier and less expensive. A will is a written document that explains exactly how the deceased wants the estate distributed. It is an important part of estate planning and should not be ignored. When writing a will, you need to choose an executor. This is the person who will act on your behalf. This will speed up the probate process and reduce fees. Be sure to include all financial assets and valuable possessions in the will.
Beneficiaries of your financial assets
As part of estate planning, you can name beneficiaries of your financial assets with your bank or other financial institution. Any asset that has a named beneficiary connected to it will not go through probate. Some examples include retirement accounts, investment accounts, and life insurance policies. You can also name a beneficiary on your everyday assets, such as your checking and savings account.
As with other fields of law such as workers comp, estate planning can be a difficult topic, and one that many people don’t think about until it is too late. No one knows when this information will be needed but being as prepared as possible will make things easier later.