This article will help you learn more about estate planning and its basics of it. We will talk about what an estate is, who should draft one, and why having one is important. We will also cover other topics such as trusts, wills, divorce and the IRS so that you are ready to work with professionals when handling your affairs.

What are estate planning strategies?

Estate planning strategies are a set of tactics used by families to prepare for their well-being in case of the death of one or more members. These documents will ensure that the family is taken care of, especially if you do not have any living relatives.

Who should draft an estate plan?

Anyone who owns assets or has a family should consider drafting an estate plan. Everyone is aware that they pass away someday. Therefore, it is only right to think about what your family will be left with once you are gone. If you already have a will in place, make sure it is updated now and then to reflect your assets and changes in your life.

Why is having an estate plan important?

Many people have their wills, but fail to draft an estate plan. A will can only deal with your assets, which may not be enough especially when family members are involved. In addition, when your heirs contest your will they can ask the courts to enforce it and will not give them any more financial support. You should think about a trust plan instead to avoid disputes and arguments. This is a way of handling assets that do not fit into your will or the common law of succession. There are many benefits contained within trusts:

  • They help reduce taxes by lowering the beneficiary’s income taxes or eliminating them entirely for all beneficiaries.
  • It is usually easy to set up and easy to administer.
  • They can help manage assets more effectively.
  • Trusts are more flexible than wills.

Examples of estate planning strategies

#1: Will

A will is a document that is used to distribute your assets and property to the people you care about. It is a legal document and it is also the most common estate planning strategy. A will ensures that your beneficiaries get their share of the inheritance.

#2: Trust

A trust is an estate planning strategy where you designate one or more people to hold on to your assets until a certain event occurs, such as when a child reaches adulthood or gets married. You can set money aside for them while they are minor and use some of it for educational purposes. This way, if something happens to you, enough funds are available for the child’s future needs.

A trust is usually more flexible than a will, but it can be very tricky to set one up. A professional like a lawyer or an accountant should handle this for you. The most important part is ensuring the trust is followed and done according to your wishes.

#3: Power of Attorney

A declaration of power attorney allows you to give another person the right to act on your behalf when you are not physically, mentally or legally in the best condition. This becomes especially important if you have been involved in an accident and cannot make any decisions for yourself. You do not need to specify this power in a will as long as it is made before death, however, it should be kept with your other legal documents.

Where can you find more information about estate planning strategies?

  • Estate Planning Resources, Inc., is a private company specializing in estate planning and can provide you with free consultation regarding what trust may be best for your needs.
  • Social Security Administration has guidance on its website on how to cope with the death of someone you love.