Estate planning is an effective way to ensure your assets are in good hands once you pass away. In the extract below, you will learn a few estate planning tips.
Start With a Will
An experienced wills and estate lawyer will assist you in writing your will. A will gives you the right to choose who your possessions go to after you die. Your lawyer will also ensure that the will is legally binding. For instance, in Australia, wills must be signed by two witnesses. The testator must sign each page of the will. If you wish to amend the will, your lawyer will help you draft a codicil.
If you die without a will, the court will divide your property among your immediate family members.
Trusts are an effective way to safeguard the inheritance of children below 18 years and beneficiaries who cannot manage their inherited estate. Typically, the inheritance is placed under a trustee who manages the wealth on behalf of the beneficiary. Trustees can be someone you trust, such as your spouse, a law firm or a corporate body.
There are various types of trusts. For example, in a fixed trust, the trustee holds the assets on behalf of one or more beneficiaries in specific amounts. As such, the trustee has limited power since every beneficiary is entitled to a predetermined share of the assets. In a discretionary trust, the recipients do not have any interests in the trust. As such, the trustee determines how to distribute the assets. If you wish to leave some of your property to charity organisations, you should open a charitable trust.
Power of Attorney
A power of attorney authorises a trusted individual to make financial and health decisions on your behalf if you are incapacitated. The rights should be given to someone who understands your wishes and how your business runs.
The executor will wind up your estate. He or she will manage your assets from the moment you die to when beneficiaries inherit their property. The executor's work includes the following:
- Working with the wills and estate lawyer to file probate.
- Taking charge of funeral preparations.
- Locating any hidden or overseas assets.
- Helping your lawyer locate and read out your will.
- Paying any debts or taxes you owe.
- Selling assets as per the terms of your will and distributing assets among beneficiaries.
Estate planning is now easy with the above tips. Write a will, determine the need for trusts, consider power of attorney and choose an executor. Contact an estate planning lawyer to learn more.