Estate planning is a systematic method that manages the personal and financial matters of a person in case of death. The legal document for the necessary plan for death is called the Last Will and Testament, which includes the set of instructions for the condition and distribution of the estates.
Regardless of the pandemic, experts say it’s important to plan for when you’re not here—that is, give thought to what would happen to your bank accounts, your home and your belongings, as well as, perhaps, your dependents.
We may think of a spoiled heiress to a large fortune, whose parents were savvy enough to prevent her from having full access to her funds. On the other hand, we could imagine a loved one with special needs, whose needs will be provided for with trust-protected money.
Trusts are legal entities that own assets, and all trusts are not alike. They are created by a written trust document with certain provisions that can vary from trust to trust.
For example, did you name someone as an heir who is no longer in favor with you or—worse yet—has died? Who should get what they would have gotten? Are there now new people in your life—be they family members or not—whom you might wish to share in what you may have?
Financial planning is an important part of life. Estate planning is one key aspect of planning for the future. It can feel daunting to take on the task, but once it’s done and your future is organized, it usually feels a lot better.
The saying goes that anyone who does not learn from mistakes in the past, is doomed to repeat them. In estate planning, if you do not learn from other’s mistakes, you are likely to repeat them.
Estate planning is not just about saving taxes, it is also about managing and protecting your assets against future creditors, both for you and for your beneficiaries.
If you think of estate planning as something only ultra-wealthy people need to do, you’re not alone. That’s a common misconception.
If you have updated your estate plan during the Covid crisis and even found a way to sign your documents while maintaining social distance, do not overlook the last step of trust funding.
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