Writing a Will is not the only thing you can do to secure the future of your loved ones. Although it can be a good start, there are several other things you may need to do prior to writing a Will so that your Will not only clears probate with ease but also gets executed easily.
Every estate needs a certain amount of planning on the part of the owner in order to suit the specific needs of every individual affected by the Will. Even if you have a trusted lawyer by your side who can take you through the various aspects of estate planning, it will help to have a basic understanding of estate planning elements.
There are various types of documents that are required for efficient estate planning and this analysis will help you get acquainted with the details you must pay attention to when planning your own estate.
An estate plan should take into consideration what should happen to the estate in the event of the testator passing away or becoming disabled. In order to make a comprehensive estate plan one must consider the following aspects:
Ø What happens to your property and the other assets upon death?
Ø The financial health of your family
Ø Ways to avoid probate
Ø How to minimise the taxes applicable on the estate
There are various ways in which one can come up with an estate plan which takes care of all these aspects. One can clearly define the ownership of assets included in the estate, designate beneficiaries to those assets and fill an estate planning form. Additional information which can be added to the estate plan includes details of medical treatments and guardianship of children, if they are applicable.
It is possible to transfer an asset automatically upon death by holding the particular asset in joint ownership. By making your spouse or loved one a co-owner of the asset you are basically ensuring that the asset doesn’t get transferred to any other person who claims a right to it after your death.
Last Will and Testament
A Will is a document which contains instructions regarding how you wish your legacy to be distributed upon your death. You can either consult with a solicitor or make use of a will writing kit to write your own Will. It must also contain clear instructions as to who should inherit the assets that are included in the estate. You can nominate any person as the beneficiary of an asset unless the asset in question has been held in joint ownership.
Assets which have been jointly owned cannot be transferred to any other person other than the co-owner. However, if a property has been owned as Tenants-in-common then each owner gets to gift their respective share in the asset to any person they nominate as a beneficiary.
If you have minor children then you may have to appoint a guardian in order to look after their physical and financial needs. Appointing a guardian is optional but one needs to appoint an executor in order to ensure proper execution of the Will.
An efficient way to minimise estate taxes, avoid probate and distribute assets is to establish a Living Trust. Those who are looking to avoid probate usually put in place a revocable Living trust as it can be revoked at any time. When assets are placed in such a trust the trustee becomes the official manager of the asset and it is up to the trustee to manage the sale and transfer of the asset and also the inclusion of new assets into the estate. The trustee cannot use the funds for his personal uses and the funds need to be transferred to the trust.
Financial Power of Attorney
An efficient estate plan always makes provision for a Financial Power of Attorney as it gives a person whom you trust, the authorisation to act on your behalf in crucial financial matters related to the estate.
When a financial power of attorney should be used depends on when the testator wants it come into the picture. He or she may either decide to implement it immediately after death or after a particular incident occurs in the future.
Health Power of Attorney
If you want to make sure that your health is taken proper care of, whilst you are still alive or in the event of you becoming disabled, you can include specific instructions regarding the treatment you wish to receive for the same. Decisions relating to your health should be taken after due consideration and should be ideally discussed with family members before including them in the Will. If you trust a person enough to make them responsible for managing your health affairs, you can grant them a Health Care Power of Attorney. This document gives them the authority to take decisions which are best aligned with your wishes and well-being.
By covering all of the above aspects in your estate planning, you will ensure that your estate has been properly planned for execution and distribution.