It’s common to feel overwhelmed by estate planning. The mere mention of it can even strike fear in many people. It suggests your own mortality. Hence, it can feel depressing while you go through the process. But thinking how it will benefit your loved ones puts you in the right mindset. As a result, you’ll feel more confident about doing the right thing.
These essential tools can also make the process easier for you. At the same time, guarantee fewer headaches as well as heart-aches for your beneficiaries when you’re gone.
Create a Will
A will is the one tool in estate planning you shouldn’t pass up. This document can help keep your loved ones from getting into petty arguments. Remember, these arguments can escalate and end up in court. The last thing you want is to have your loved ones fighting over material possessions. Hence, as part of preparing your will make sure to discuss your intentions with your beneficiaries.
Establish a Revocable Living Trust
A revocable living trust offers two benefits. First, it’s a tool to keep your assets out of probate court. Second, you keep control. Hence, you’re still in charge of your assets up until your deceased. The successor trustee you chose takes over when you die. As a result, your wishes are fulfilled as you wanted to.
You can also get an irrevocable trust. Yet, this option isn’t used often. Unlike the first type of living trust, you’ be giving up control while you’re alive. Any modification or termination of the trust can’t be done without the consent of the beneficiary.
Set Up Other Types of Trust
A trust is an essential tool in estate planning. Yet it’s rarely used by many. Chances are because of its reputation as an option reserved for the wealthy. Rest assured it isn’t. In fact, anyone can set up one. The main components of a trust are the trustee, the trust property, a trust document, and the beneficiaries you name.
Apart from putting your home in a trust, you should also consider your savings account, IRA, and 401(k)s. Your options include setting up a credit shelter, a qualified personal residence trust, or a Crummey trust. Your other options include a qualified terminal interest property trust or a special needs trust. Charitable remainder trust is also possible.
An estate planning attorney danville ca can tell you on which type of trust works best in your specific situation.