Jumping into estate planning can feel like information overload—learn the answer to 10 common questions regarding estate planning.
If you are like most people, you know having your estate in order is essential, but it’s a task at the bottom of the list, probably below your dental appointment. We get it! No one wants to think about death. But you’ve spent your life working hard to buy your dream house, save up some cash, and invest wisely. You don’t want all that to go down the drain when you pass away, right?
That’s where estate planning comes in! In this article, we’ll give you the low-down on estate planning FAQs and show you how doing it can help you keep your hard-earned goodies safe and sound for your loved ones.
10 Common FAQs About Estate Planning
1. What is an estate plan?
An estate plan is a binding, legal document created to fulfill your wishes. To start planning for your estate, you will gather essential documents, inventory your assets, and decide what will happen to your assets after you pass away. It can feel like a daunting process, but it can be accomplished quickly when taken in small steps.
2. What makes up my estate?
An estate is the entire combination of the net worth of an individual. This includes all land and real estate, property, financial securities, cash, and other assets the individual owns or has a controlling interest.
3. What is the difference between a will and an estate plan?
A will is one essential document in an estate plan. An estate plan is a comprehensive plan that includes other legal documents and strategies to manage a person’s assets and affairs during their lifetime and after death. An estate plan may also have directives or powers of attorney, which give trusted individuals the authority to make financial or healthcare decisions on behalf of the person if they become incapacitated. An estate plan can also include a revocable living trust and other structures that are managed by a trustee.
4. What happens if I die without a will?
If you die without a will, your assets will be distributed according to the laws of your state, which are called intestacy laws. The process is called probate. The intestacy laws determine your legal heirs, typically including your spouse, children, and other close relatives.
Without a will, you have no control over who receives your assets, and your assets may be distributed in a way that does not reflect your wishes or priorities. This can lead to family disputes and legal challenges that can be costly and time-consuming.
In addition to the distribution of assets, a will can also name an executor to manage your estate, provide for the care of any minor children or dependents, and specify your funeral arrangements and other final wishes. These are not details that you want to leave up in the air.
5. What is probate?
Probate is the legal process after a person dies to settle their estate, pay outstanding debts, and distribute their assets to their heirs or beneficiaries. Probate is typically supervised by a court and is required in most states when a person dies with a will, but it may also be necessary if the person dies without a will (intestate).
During the probate process, the executor named in the will (or an administrator appointed by the court if there is no will) gathers and values the deceased person’s assets, pays any outstanding debts, and distributes the remaining assets to the beneficiaries according to the instructions in the will. The executor or administrator may also be responsible for filing tax returns and paying any outstanding taxes the estate owes.
6. Do I need a will if I am not rich and don’t own many assets?
It is still a good idea to create a will, even if you believe your estate is small. A will is a legal document that allows you to direct how your assets should be distributed after you die. Even if you have relatively few assets, a will can provide necessary guidance to your loved ones and help avoid potential family disputes or legal challenges.
7. How often should I update my will?
You should update your will anytime you have a significant life change that includes marriage, divorce, job change, moving from one state to another, the birth of a child, acquiring a large inheritance, or purchasing real property.
8. What are alternatives to having a will?
It is advised to have a will for anyone over 18 because it involves more than just assets. In some cases, a Transfer on Death (TOD) designation is a good option for transferring property or benefits and avoiding the probate process. Having a TOD in place means that the property is under the original owner’s ownership and transfers to the designated person only after death. Another option is joint tenancy with rights of survivorship; in this legal ownership agreement, the property, or asset is jointly held.
9. Do I need to update my will if I move to a new state?
There are a million things to remember and manage when planning a move to a new state. One important task that should be considered is updating your will upon becoming a resident in your new state.
Every state has different laws and document requirements, and although your will is laid out and your wishes are documented, minor adjustments need to be made to align with the new state you reside in. The last thing you want is for your family to be in a stalled probate process while the courts try to reconcile what is in your will with what the state requires. Add this task to your new move checklist, as you do with your vehicle registration and driver’s license, and it will help you remember to make it a priority.
10. At what age should I get an estate plan?
Anyone 18 and older should have a will and begin building an estate plan. One of the first essential documents a young adult can add to their estate plan is a Medical Power of Attorney, where they lay out medical decisions and who will make them. Once you acquire assets and wealth, get married, or have children, you should have an estate plan.
Estate planning isn’t just for the elderly or super-wealthy; it’s for everyday people who want to protect their assets and communicate clearly with their loved ones when they are no longer here. Learning the basics is the first step in taking control of all the hard work you have put into building your life and making sure that you have a legacy to leave to those you love.
Mobile Estate Planning Made Easy
The process of getting a legitimate will in place for you and your family can be overwhelming, confusing, and costly, but it doesn’t have to be! At Assurest, we offer simple, affordable solutions for your legal needs and make the process easy by coming to you for the conversation—meeting you in your home or, if you prefer, virtually or over the phone.
Serving the Greater Richmond area and beyond, our experienced and trustworthy professionals simplify the process using clear, understandable language free of legal jargon and provide flat-rate packages, so you’re never surprised by the bill. Contact us today and rest assured that your affairs are in order and your loved ones are protected.