The first thing you need to know is that practically everyone has an estate, not just wealthy people with mansions and manicured lawns. IRAs, 401(k) plans, houses, cars, investments, life insurance policies, bank accounts—even baseball card collections—are part of your estate no matter how modest these assets may be. Another important thing to remember is that your estate plan may include both a will and a trust. A will goes into effect after you die, but a trust goes into effect as soon as it’s created and allows your assets to be distributed before or after death.
The Three Ws of Estate Planning:
Who
Think about the people in your life who you would like to receive some (or all) of your property when you die. Most people choose close relatives such as spouses, children, grandchildren, and siblings as beneficiaries. Other people on the Who-List might not be people at all. Favorite charities and even pets can be beneficiaries in your will or trust.
What
This involves designating what you would like to leave to whom. A surviving spouse often inherits your home, furniture, and cars and is the beneficiary of retirement plans, insurance policies, and bank accounts. You may also choose to leave money, property or items of sentimental value to other beneficiaries.
Where
As we mentioned earlier, you can place your property in trust—especially if your goal is to decrease estate tax liability, avoid probate, or provide for heirs who are minors or not responsible with money. The Trustor will set up your trust, while the Trustee will ensure the rules of your trust are followed.
Count on The First to help you navigate the complexities of trusts and estate planning. Visit our Trust & Wealth Department to learn more.
Other Plans
Determining how you want your property distributed after your death is one way to help simplify the lives of those you care for. An Advanced Health Care Directive is another. This document, also known as a Living Will, Personal Directive or Advance Directive, tells relatives and health care providers what kind of care decisions you would make for yourself if you could. Many people draw up this document before undergoing surgical procedures or to ensure that their wishes are carried out in the event that an illness or accident leaves them incapacitated.
Note: The information contained in this blog is not intended as a substitute for the advice of a qualified legal or estate & probate professional.
What do you think are the most important considerations when planning an estate? Let us know in the comments below.
