All worldly possessions have to be left behind when death calls upon you. If you are of mature age, there is no doubt in the fact that you would have something in your possession. This possession needs to be distributed among important stakeholders.
While planning for your estate planning, there is a high probability of you making decisions out of impulse. This irrationality can lead to severe consequences.
So, you have to be mindful of this distribution. To cater to that, there are four important estate planning factors that you must consider before you consult your lawyer.
These have been discussed in this article. Before anything else, it is important to gain productive insight into what estate planning is.
Estate Planning is done for contingency. In this, the individual does not necessarily have to be on their deathbed. They can make a will before they encounter any serious situation in life. The individual plans for the future, one that does not have them in it.
They think about all the individuals who will gain a share of their property and belongings. These assets may have a physical nature or might be non-physical as well. One might think that individuals can only transfer their assets to their close ones. However, that is not true.
Any debt obligation that the individual has can and will be transferred to their close ones as well. Due to this, these individuals try their best to eliminate and pay off any sort of debt obligation that they might have incurred. It revolves around not only the distribution of their belongings but also the preservation if needed.
Reasons For Estate Planning
There are multiple reasons for conducting this time of contingency planning. The first reason is to keep the family’s wealth intact. The wealth would not have to go out of the family’s accounts.
Moreover, the individual wants their family to live a happy and stable life ahead. They want their children’s future to be as secure as possible, or they might want to do something good for society and set an example.
Assets Included In Estate Planning
Multiple assets can be transferred by the individual to their heirs and other parties. These assets include their house, car, stocks, shares, bonds, plots, digital currency, expensive sculptures, and even life insurance.
Stakeholders Of Estate Planning
One might wonder about all the parties to which one can transfer their property and debt obligation. Some people believe that only the family members of that person can take hold of these things. That, again, is not true. The individual can distribute their wealth among the following parties:
This goes without saying that any departing individual would want most of their wealth to stay with their family members, especially their spouse, children, or parents. You need to see if one member would get more than the other member.
If you know that your friends require money or if you have anything to treasure with your friend, you can transfer it to their name.
In some cases, the individual might have invested in insurance for their family members, or they might have taken a particular loan from an organization, then you will need to have a lot of monthly or annual payments for them.
Some people want to set an example by passing down their legacy. They contribute a good amount of their property (not any debt obligation) to society and those in need of money.
Now that we have developed insights about estate planning, it is important to discuss the four main elements of estate planning. These have been listed and discussed down below.
Consistency Of Will
The will that you make is the most significant outcome of estate planning. It tells you all the reasons behind the decisions made by the departing individual. The will needs to be consistent because any mistake can be irrevocable, as the one who made the will can only make the desired changes.
Search for mistakes in the will by rereading and proofreading it. Make sure you have not transferred the same property to two different people. You must also see if you have accurately guessed the value of your will. If it is under or overestimated, that can create issues and conflicts. Many feuds arise when it comes to wills.
Your attorney is the only person you can trust the most when it comes to wills. Every day we hear a lot of news about how the hearts of heirs get bitter when they hear about wills. The probability of greed and fraud is high.
The attorney would be unbiased and would also give you rational advice. You must make sure that the attorney you are in contact with is not being fed money from any heir of the will. Fraudulent activities of such sort are reported daily.
Deciding On Guardianship
This is done if one of the parents has already passed away. To cater to the stable future of your children, you must decide about their guardianship. You might want to consider all the options that you have about different families.
You need to consider the financial standing of that family to see if they can afford the lifestyle that you were providing to your children. You need to see their position in society, their reputation, and even the current family structure of that couple. This would help you in making a wiser decision. Moreover, this is only done if your children are not of age (minors).
Witnesses Of Estate Planning
Yes, there is no doubt in the fact that your attorney needs to be trustworthy, but at the same time, you need to have witnesses of the estate planning you are conducting.
This would not only help you in bearing proof but would also help you in taking their opinion. Later in the future, there would not be any type of feud between the family members. You do not have to include all the family members and heirs.
You only need witnesses of sound age. Their signatures on the will are necessary. You must choose the witnesses wisely as they must not be biased. These witnesses also attest to the fact that you did not make the will out of pressure.
These are all the important factors that you must consider before you begin estate planning. It would not only provide you with a clear sense of direction but would also help you in keeping a balance between what your heart wants to do and what your brain tells you to do.