An introduction to estate planning fundamentals
Estate planning can be an intimidating topic and knowing where to start may seem difficult. The best time to plan for your incapacity or death, though, is while you’re still healthy. With a little time, effort, and professional guidance, you can develop a plan and obtain peace of mind. Failing to do so can place the security of your family and assets in jeopardy.
What is your estate?
Your estate is comprised of everything you own: your home, bank accounts, 401K, business holdings, investment accounts, etc. In addition to what you own, your estate must also consider your minor children and pets. It’s important to be thoughtful and strategic about how, when, and to whom your estate is divided and distributed. Inaction usually means the control of the distribution of your assets after you pass governed by the state laws. This is known as intestacy. This intestacy process leaves the court in control and your loved ones with few options.
A well-prepared estate plan can ensure the safety and security of your family long after you have passed. A financial planner can help you make important financial decisions about your estate while you’re still in good health and help ensure your trust is funded and safeguarded for the next generation. If your trust is unfunded (meaning you haven’t put anything in it), your loved ones could face a public, costly, and time-consuming probate experience upon your death. Don’t worry, funding the trust sounds complicated, but working with a professional makes it fairly easy.
The trouble with using a will only
Many presume that a will is more than enough to convey their wishes for their estate after they pass. Unfortunately, with only a will, the plans for your assets are only effective upon your death and require a probate court proceeding to work. Additionally, wills often overlook how helpful specific restrictions for the spending of their inheritance or “guidelines” can go a long way to preserving your legacy.
It is easy for loved ones to see an inheritance as a windfall. Too often, a person’s legacy is frittered away by poor decisions made by grieving family members. That’s why most inheritances are gone within a mere one year of receipt. The national average for a child to spend his entire inheritance is one year. With proper estate planning, you can put your beneficiaries in the best position to manage their inheritance in a way that will be the most beneficial to all involved and continue your legacy for future generations.
There are many options available to you, and we are here to walk you through the solution that is best for you. To learn more about these concepts, join us at an upcoming estate planning seminar.
Attorney Shawn Garner hosts free monthly seminars about wills, trusts, and long-term care. The next seminars are 10:30 a.m. Thursday at the Main Library and 10:30 a.m. Friday at the Foothills Library. RSVP by calling (928) 783-4575 or visit YumaEstatePlanning. com.