Nobody likes to think about their imminent demise…but whether you are young or old, in good health or bad, it pays to make plans for the day that you will no longer be around to own and manage your assets and responsibilities.
Sadly, many people bury their head in the sand when it comes to thinking about their future, or more importantly, the future of those around them. Not planning your estate can result in some of the value of your assets being lost to probate expenses, taxation and financial disputes between loved ones which can cause more grief than just money.
Estate planning needn’t be as complicated, intimidating or expensive as you might think. There are several areas you will need to think about as part of your estate planning strategy.
Wills – Having a good will in place is important step to making your wishes known. Your will is an important asset in distributing both your financial and personal assets. As part of your will you will need to appoint someone to administer your estate. It will be their job to see the successful distribution of your assets in accordance with your wishes. Once a person dies the administrator of the estate will need to seek probate – the authority and acknowledgement from the courts that they can legally dispense with the estate. A clearly written will makes the process of probate much easier.
Power of Attorney – You may find yourself in a situation where you are unable to administer your own assets or make decisions for yourself. In this case, a power of attorney will be able to act for you. Appointing a trusted person as your power of attorney will help in the event of your incapacitation and ensure the smooth continuation of the process
Asset Distribution – You will most likely have intentions for where you want your assets to be distributed. Whether it is to family members, friends or donated to your favourite causes the starting point is knowing the assets that you have. Ensure you have a good record of all assets, liabilities and important documents to make the task easier for your estate administrator.
Estate Administrator. As with appointing a power of attorney, choosing your estate administrator is an important decision to make and you need someone who you have trust in, who can deal with financial and legal matters. They will be responsible for your funeral arrangements as well as the distribution of assets.
Life insurances. Do you have life insurances in place? If you have assets that will need to continue providing income to loved ones you may want to consider life insurance as a means of repaying any debts these assets might have. If debts are owing your beneficiaries may see the assets being sold up to repay loans, leaving them without the asset and income security you intended them to have.
It’s important when planning your estate that you talk to a financial advisor or lawyer who can provide you with the knowledge and advice to make the right decisions. This will ultimately leave your beneficiaries with the best financial future you can give them.
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The information in this article is general in nature and does not take into consideration your personal situation or circumstances. You should consider whether the information contained in this article is suitable to your needs and where appropriate, seek professional advice from a Financial Advisor or other finance professional.