You have probably heard about Estate Planning. It’s how you arrange who will manage your properties or inherit them when you are no more. It’s a challenging process but worth it since it avoids inconveniences when you die. There are four main ways assets can be distributed to heirs. You can gift the assets while still alive, have trusts established during your peak, or have distribution done through a will. All these methods have pros and cons. Here are some of the ways explained in detail.
Gifting The Assets When Alive
You have probably heard individuals inheriting parcels of land or properties from their parents or other family members. It involves giving away the assets before they die. This process is one of the best since you can give the assets and monitor the process, thus having fewer inconveniences. The gifting process sometimes doesn’t have any documentation. The only process involved here can be changing the ownership details when gifting a house, car, business or other big items. Before gifting your assets, you have to understand barriers that vary from one state to another. Some estates require paying the ‘gifting’ fee, while others may need the person offering the gift to fulfill some regulations.
Writing A Will
Having a will is one of the ancient methods, and it’s the most effective way of distributing properties to heirs. It involves an estate planning process that determines who inherits what and when. Most people have the perception that estate planning is only for the privileged. According to experts from this estate planning law firm, anyone requires a will even on the small items they possess. It helps to solve disputes and inconveniences when you breathe your last. When you don’t write a will, it’s the state which takes up your properties and decides how they are divided. To come up with good will, you have to evaluate your assets. The second step involves listing the dependents before deciding how to distribute the assets. You also have to appoint a personal representative then have a final, official, signed document to represent your stand. It’s important to have a lawyer to help you finalize the process.
Protecting Your Assets With A Trust
Protecting your assets with a trust involves appointing a trustee who will see the distribution of your assets. How is it different from the will? The trust can affect distribution when still alive. In most cases, the will works when you are dead. Most trusts manage the properties without getting subjected to court processes, and you can decide to have both the will and the trust in your estate planning. There are typically two types of trusts in play. These include the living trust and the irrevocable trust. You can change the revocable (living) trust anytime you need changes, while you can’t cancel an irrevocable trust. Most revocable trusts do become irrevocable when the trustor dies.
What are the advantages of protecting your assets with a trust? Protecting your assets with trust avoids the probate process by a court of law. You only need to transfer your assets to heirs through a trustee. Another advantage is that it’s private, unlike a will, which sometimes gets subjected to a public court. Other benefits include having cost and tax reduction and protecting family members from vulnerable individuals.
Intestate Succession
This step involves distributing assets to heirs where there is no will and happens when the estate owner dies without leaving a will, a trust, or any other distribution hint. So who is in charge here? The state guides this process and determines who benefits from the left assets. The state can appoint a spouse to the deceased or the older children to oversee the assets’ distribution. If appointed as the executor of the assets, it’s important to consult your lawyer to understand how the distribution process goes. According to the law, only the spouses, children, and blood relatives can inherit the assets. Unmarried partners, charities, indirect dependents, or friends get nothing from this succession. However, there are varying rules according to states which govern this distribution. It is important to go through the rules and familiarize yourself with them if appointed as the executor.
Estate planning is crucial to any person regardless of the properties they own. Even though it’s unethical to discuss death in some cultures and who inherits your properties, it prepares you for the way while leaving your heirs’ taken care of. Most people who don’t write wills leave their families devastated until the state chips in. You need to consult a reliable estate planning attorney to help you choose the best distribution method according to your assets and dependents.
