What to Know About Estate Planning

It’s natural, especially during pandemic times, to be worried that your affairs may not be entirely in order. Proper estate planning is not something that should be put off. There are ways to properly plan to ensure your wishes regarding your loved ones, as well as your assets, are carried out.

What is Estate Planning?

Estate planning is making a plan in advance for what happens to your assets after you’re gone. Everyone has an estate. It includes anything you own such as your car, house, bank accounts, investments, and more. Here are some important aspects for estate planning that you should know.

Creation of a Will

You may think that wills and estate plans are interchangeable terms. In actuality, a will is a small part of your overall plan, including factors such as children and property.

For example, without a will, a state court will decide who will get your assets. If you’re a parent, a state court will also decide who gets custody of your children. In simpler terms, a will is a document that says who gets what, and creating one gives you all the say.

Revocable Trusts vs Irrevocable Trusts

A trust is an agreement made when managing assets. A revocable trust can be changed, whereas an irrevocable can’t be modified after it’s created without consent.

What makes revocable trusts the most desirable are avoiding probate and protecting the privacy of the trust owner. If you have assets in more than one state, or a combination of investments, you might consider a revocable trust over a will.

 Guardianships

If you’re a parent to a minor, the most important aspect of your estate planning will center around who will act as guardian to your children should you and your spouse pass on. It’s important when making this decision that the person you choose have similar parenting styles, values, and religious beliefs, as well as consent to the appointment.

 Power of Attorney

 Like guardians, a Power of Attorney, or POA, should be someone that you wholeheartedly trust. This person will be in charge of financial, business, and personal affairs.

 This isn’t a decision to be made lightly; it requires careful examination. In most cases its either a spouse or a child. If you have multiple children, be sure to consider each child’s personality traits, their ability to handle high pressured situations, and reliability.

If you’re ready to make decisions regarding estate planning, contact Hosmer King & Royce at 417-869-9999.