Unless you are struggling with health issues or don’t seek legal advice, the idea of making a will can seem daunting. But any lawyer will advise you that having a will is crucial for protecting your assets. Although you are not legally required to prepare one, it is in your and your loved ones’ best interests. In this article, we discuss what you should know about estate planning.
What is estate planning?
Your estate is made up of your assets and liabilities. Estate planning, however, includes many different elements, like legal documents and preparations for your family. Nowadays, it doesn’t just involve your property or money. More and more experts also include digital assets (such as bitcoin) and pets within estate planning.
The most important documents in the process are a will, which outlines the management of your assets once you pass away, and Power of Attorney (‘living will’).
Without a will, the laws in your territory will decide how your estate is managed and divided. When you have an estate plan, you can enjoy peace of mind, knowing all of your assets are in safe hands. Plus – you can minimize the expenses related to taxation and administration costs.
How can you make a will?
Writing a will is unlike anything you’ve seen in movies. It’s not as dramatic or overwhelming as it may seem. In reality, it’s a simple legal document that explains a course of action. When making your will, consider getting professional legal help. This way, you will have the guarantee all of your documents have been prepared correctly.
It is also important to update your will and ensure it reflects the state of your current finances. Ideally, you should revisit it after any significant milestones, like marriage, divorce, or the birth of your child.
An essential part of the process is choosing your executor, who will deal with all the paperwork, paying taxes, and distributing assets. These are all very responsible tasks, therefore you should select a person who is reliable and trustworthy.
The executor doesn’t have to be your friend or family member – it can also be an accountant or lawyer. Keep in mind that the role will require plenty of hours. Even if you have a relatively simple estate, wrapping it up will take around 12 to 18 months.
What paperwork is needed?
To have a successful experience, your executor should have as much information on your estate as possible. First, you should create a list of your main assets (whether that is your house, investments, or anything else). If there is anything particular you want to leave to specific people, you should mention it.
Likewise, you should inform your executor about your liabilities, so they know what debts must be paid. It is also important to name beneficiaries for your investments and write down life insurance policy information. Try to be as detailed as possible!
Creating a will is a ‘must’ in estate planning. Don’t let the superstitions discourage you from preparing one. If you need assistance in writing or updating your will, our team would happily help. Reach out to us here.