Estate planning is a smart move by anyone who wants to protect their assets and make sure their assets are used properly to help their family's future. No matter what types of assets you have, it is important to get involved in estate planning to ensure your family's future. If you are getting involved in estate planning for the first time, then there are some common mistakes you could wind up making. Before you visit with your estate planner, you should make sure that you have done your homework and are as ready as you can be.
When people start preparing for estate planning, they usually think of the big assets such as their home, jewelry, or car. It is very common for people to forget about the summer cottage they own, their investment portfolio, and other assets that are less common. Be sure that you sit down and list out all of your assets before you go to your estate planning meeting and be sure your list includes everything you own that is of value.
The creation of a will requires a lot of information, including the names of those who you want to have your assets when you pass away. But what would happen if, just before you passed away, one of your beneficiaries passed away as well? It is always a good idea to have at least two beneficiaries for each item, or three beneficiaries if you want to be absolutely sure your assets will go to the right person.
You decide to leave a portion of your assets to your local church, but you want your church to start a soup kitchen with those assets. If you do not explain specifically what you want done, then there is a very good chance it won't happen. Be sure to discuss any potential special distribution instructions you have with your estate planner to make sure all of your instructions are in place.
The probate court in your state will not start distributing your assets to beneficiaries until your estate expenses have been paid. If you know you will have a lot of expenses such as tax payments and credit card debt, then you need to plan for that if you want your beneficiaries to get your assets. A good way to handle estate expenses is to get a life insurance policy made out to your estate and have your estate use those funds for final expenses. This will prevent any of your assets from being used for anything other than your final distribution instructions.
Your life changes from year to year, and your estate must be regularly updated to reflect those changes. Too many people think that once their estate is set up, then they are all done. The truth is that you should schedule an estate planning update meeting at least once a year to alter your estate appropriately.
Getting estate planning done is a necessary part of a person's financial and legal life. Before you head out to your first estate planning appointment, you should make sure that you have all of the materials you need and are prepared to completely answer all of your planner's questions.
When you ask the average person their feelings on an estate plan, most people will probably tell you that an estate plan is something reserved for the wealthy. The truth is that every consumer who has a family and any assets needs to have an estate plan in place. An estate plan will help make it easier to get your final wishes through the probate court and it will ensure that your assets are distributed as you want them to be after you have passed away. Every estate plan has some basic elements that need to be included if your plan is going to fit your life.
Depending on your asset situation, your estate planner may choose to do a will or a trust. If you have considerable liquid assets and real estate, then it will probably be a trust. If you do not have considerable assets, then your planner will use a will. The biggest difference between the two is a will has to go through probate court where a trust, for the most part does not.
Your will outlines who you want to administer your estate when you are gone and how you want your final assets to be distributed. It is important to remember that if your estate expenses are more than your assets, then no one will get a distribution from your estate except your creditors. But your will is where you outline exactly how you want your assets handled and who is to handle them for you.
A power of attorney is when you legally allow someone else to handle your financial affairs and sign contracts for you. Sometimes you use a power of attorney when you are incapacitated and cannot speak for yourself. But if you have to sign contracts on the other side of the country, the easiest way to handle the situation is to give someone you trust a power of attorney to sign those documents for you.
A health care proxy, also known simply as a health proxy, is a declaration made by you that allows someone else to make medical decisions on your behalf if you are ever incapacitated. If you have special religious beliefs or an aversion to certain surgical procedures, then having a health proxy in place can make sure that you are not subject to anything you are against, even if you cannot speak for yourself.
If you need to protect assets from processes such as a Medicaid application or a creditor lawsuit, then much of that can be done in your estate planning. Your planning expert will use legal vehicles such as LLC structures and other ways of protecting your assets.
If you do not already have an estate plan, then now is the time to get one. If you have assets (a house or a car) and a family, then you need to have structures in place that will protect your family after you are gone.
There is a lot being said about the Millennial generation, and not all of it is complimentary. But Millennials are proving to be very financial savvy and proof of that comes from the need for Millennials to start estate planning at very early ages. For most people, estate planning is something they do as they get towards the twilight of their life. But Millennials in their 20s are estate planning, and there are a lot of good reasons why.
The housing situation for Millennials is worse than almost any other generation in history. Housing costs have risen out of control, while Millennials find other ways to preserve wealth. As a general rule, Millennials are very conscious of how they take care of their money, which makes estate planning desirable. Even if an Millennial cannot afford a home, they are still building up investments and bank accounts that the Millennials want to have distributed in certain ways when they pass away. Estate planning makes sure that all of your assets are distributed as you want them to be, even after you have passed on.
There are many tax breaks to building an estate using a trust now that offset any of the costs the trust may require to create and maintain. Millennials are starting to realize that trusts can be useful to people when they are alive, as well as act as a way for their assets to pass by probate court when they pass away. Many Millennials are realizing the living benefits of a trust, including the tax benefits, and they are taking advantage of those benefits right now.
The Millennials were brought into a world where jobs were hard to find, technology connects everyone, and success is far from guaranteed. Their world is an open book, and they understand that anything they have accumulated can be taken away at any time.
One of the biggest misconceptions about estate planning is that it is only for elderly people. But if you are a 20-something Millennial who gets permanently handicapped in a car accident and you have no estate planning, then life is about to get very complicated for you. The Millennials take nothing for granted and believe strongly in contingency planning. That is why legal vehicles such as life insurance and estate planning, that are usually shunned by other generations, are welcomed parts of contingency planning for Millennials.
Estate planning early for any generation makes a lot of sense. But because of the stigma attached to estate planning and the notion that it is only for wealthy elderly people, too many people ignore estate planning until later in life. Millennials are a smart generation that takes nothing for granted. That is why you are seeing so many young Millennials utilizing estate planning to help them financially now, and protect them in the future.
In the world of real estate, the contract is king and there are a lot of kings to keep track of. One of the most misunderstood types of agreements in real estate law is the quitclaim deed. While you may have heard of a quitclaim deed, there is a good chance that you do not understand what it does and what it is for. Before you start demanding that your attorney draft a quitclaim deed, you should spend some time researching whether or not you really need one.
A quitclaim deed is a document that can transfer ownership from one party to the next, but it is not used during a real estate sale. It is most commonly used when:
The deed transfers ownership of the land to another party as part of a legal process. A sales contract transfers ownership of the land and its contents to a new owner after a legal transaction. The deed and the sales contract often work hand-in-hand. The sales contract is the promise to transfer ownership of a property after some type of transaction is finalized, and the deed is the actual transfer.
There are two common types of deeds; quitclaim and warranty. The warranty deed is the one that is used to transfer ownership of a property after a transaction has taken place, and a quitclaim deed transfers ownership of a property without the need for a transaction. When you buy a house, you get a warranty deed. When you add or remove your spouse from the title to the property, you use a quitclaim deed.
Title insurance companies and attorneys use deeds to determine property ownership, and liability during property disputes. When it comes to determining which type of deed is appropriate in which situation, that is something best left to an attorney. While there are concrete rules surrounding the use of each type of deed, sometimes those rules get gray when they are applied. That is why it is always best to have an attorney handle the deed process to any property issue.
As we mentioned, a quitclaim deed is used to transfer property from party to the next, such as when a property owner passes on and the property ownership is transferred to next of kin. Other instances where quitclaim deeds become important include:
If you feel like you need to address an ownership issue with your property, then it is time to talk to an attorney about a quitclaim deed. In many instances, a quitclaim deed can ensure that your family property stays within the family if something should ever happen to you.
