Death, as they say, comes like a thief in the night. That’s why many people prepare their last will and testament to make sure their assets are distributed according to their wishes.
Your wishes may not be carried out in exactly the way you were hoping if you pass on without a will in place. In such cases, the state distributes your assets as it sees fit. Seeking a lawyer’s advice on estate planning will take the confusion out of the process and protect your loved ones from potential financial ruin.
Making a last will and testament may vary from one person to another, depending on circumstances, but this is how it is usually done.
Identify your assets
Before drafting your decision, you need to identify your assets. These include your home, plots of land, business, art, jewelry, furniture, and even your creative works.
Your assets also include your bank accounts, bonds, investment accounts, retirement accounts, and life insurance policy.
Choose where to put your money
In making a will, you must decide whether to give your estate to family members or a charity or both, and how much you will provide for each.
Wills with a large sum going to a charity are occasionally contested by the kin who feel they should have received more. Distributing assets among relatives also often lead to inheritance war, damaging family harmony. This can cause delays, additional legal costs, and heartache. Consult with your lawyer on how this can be avoided.
Determine a basis on dividing the estate
Transferring your assets equally among your children seems fair, this is why many parents go for this approach to avoid disputes.
However, there are circumstances that warrant unequal distributions, such as when one of the children has a special need that requires continuous medical care. Another situation where fairness does not make sense is when adult children do not have the same level of financial success and earning ability.
While you want to be fair, utmost consideration is needed to make sure everyone is well provided for.
Deciding how to give your money after your death is not easy, but it is necessary. Although it may be difficult to have a conversation, you should have an honest discussion with your family members about your plan and how you would like to distribute your assets upon your death.
No parents want to leave family infighting as his or her legacy. If all stakeholders are on the same page before you die, there is less likelihood that bad feelings will arise later on.
Consider the taxes
Taxes can reduce the amount of your assets so you should consider their effect on the inheritance you will leave behind. You can limit estate taxes by setting up a trust account for your heir. Another way to reduce tax is to bestow the asset as a gift.
How you choose to dispose of your assets after you are gone has long-term implications. But remember that those assets are yours and it’s your right to distribute them as you see fit.
Estate planning is something you should consider doing early on so you can be at peace that everything’s in order and your family is protected in case of your untimely passing.