Estate Planning is a Necessity

Some people feel that it is not necessary to do estate planning, because either they do not have much in the way of money or belongings, or they do not have children. This assumption is not correct. If someone owns anything that they would like someone else to have after their passing, they need to plan ahead by drafting and filing a will, as well as establishing a trust.

Filing a will is usually the first step of estate planning. This is a legal document that indicates how a person wants their belongings to be divided after their death. Most people have an attorney draw up the document, though some choose to do it themselves. Once the will is complete, it is filed with the court and becomes a legally binding document.

Establishing a trust is something that more and more people are beginning to do in order to place certain restrictions on their assets, save their heirs from the obligation of gift and inheritance taxes, or to help settle the division of property more quickly upon their death. Individuals with any amount of property can benefit from having a plan of action pertaining to their belongings.

There are two different kinds of trusts, revocable means that the person can still have access to all of the assets of the trust, where irrevocable means that the assets are no longer available for use by the person who established the trust. When establishing this, most people will go to an attorney who specializes the field because if anything is set up incorrectly, it can render the entire document invalid.

In addition, there are certain assets that are subject to taxation and should be made a part of the estate planning process. These include life insurance policies and pension or retirement plans. It is important that the attorney that is hired to draw up the will be one that is experienced in these matters. In order to determine the attorney's experience it is best to do an in person interview and explain to the attorney, in detail, what type of plan needs to be established and what assets will be included.

Estate planning may make some people feel uncomfortable. Their own death may not be something they want to think about. It is important, especially for those left behind, to have everything completed. When dealing with the death of a loved one, someone may forget important details or they may not realize the necessity of working quickly.

Moreover, they may not be prepared for, or comfortable with, the decisions that they will have to make in order to settle the designation of property. Drafting a plan now can help save time, money, and hopefully some heartache during the months after a loss.