A grim and not very pleasing question to answer, but no less an important one to consider when it comes to your legacy and what you plan to leave behind when all is said and done. If you have loved ones who depend on you and who are in your care, the best safeguard you can have in the event of an untimely death is an estate plan.
Estate planning can be a difficult and uncomfortable topic for most people. A lot of us aren’t exactly enthralled to talk about what the world will be like after our passing. Nonetheless, if you have families and heirs you’d like to pass down your assets to, it’s important to have a system in place, a strategy to make sure the most valuable things you earn end up with the right people and not with strangers.
What you probably weren’t too aware of is that there’s a whole legal side to estate planning and asset protection that can have some unforeseen challenges. That’s why lawyers get involved.
What Should You Know About Estate Planning?
Estate planning involves a comprehensive strategy to manage your most valuable assets and belongings to make sure they are rightfully passed down after your passing. These strategies most commonly involve creating wills, trusts, and other legal documents so your ducks are in a row when the time comes to transfer everything. Worst case scenario, the wealth you worked so hard for might become a government or stranger’s asset if your possessions are not properly transferred.
So where do you start? Well, first, before you even dive into the foray of trusts and wills and power of attorney, you’ll need to make sure you have a checklist of everything you plan to pass down. This may be a more extensive list than just the property you own or pricey furniture or your most prized car or a collection of jewelry, but it could even range to things like toy collectibles or power tools and lawn equipment. Not to mention tech like TVs and computers or generally expensive things like power tools or a lawn mower. Especially antiques, and anything that might be so antiquated in the future (say, 50 years from now) that it appreciates by double in its worth.
You’ll want a list for all of these things as well as to photograph many of these items so nothing gets caught in the crosshairs.
Beyond physical items, as well, you’ll probably have non-physical assets you want to pass over too, such as life insurance, 401(k)’s, bank accounts, so you’ll need to document all of these things, including account numbers and the contact information of whatever firm may be holding these policies or assets.
On top of that, any memberships (like if you’re part of a charity organization or a veteran’s association) should be organized as well.
Practically, your entire life will need to be documented, and that could be a pretty daunting task, but not necessarily one you’ll need to handle alone. You can enlist the services of an estate lawyer to help you document, organize, and strategize your estate plan with real-time legal advice and detailed focus.
Consulting an attorney, or any estate administrator or personal accountant, is so important for your estate plan to test the veracity of everything you’ve put together. Chances are, they may be aware of insurance policy updates or changes in the law that could flip your entire estate plan upside down, so having their legal advice at the ready is key.
An estate lawyer will also be essential for making copies of your lists and documents, reviewing them, and updating your insurance policies so that you may authorize “transfer on death” designations. This is where you’ll especially need their help because (in most states) your assets will go through a probate court. This is when your will is “proved” in a court of law and the estate can be settled through the laws of intestacy.
With your assets in order, you’re ready to prepare your last will and testament.
How To Draft A Will
A lot of people have the misconception that you should only have a will when you’re old and gray. That is not the case at all, everyone should have a will if they are above the age of 18. Untimely deaths, while heavily unfortunate, do occur quite frequently, and at any age you may have assets and possessions worth passing down that you worked hard to earn.
Whether your possessions are documented or not, you should write a will that outlines who gets what in the event that you die. Though, it would be helpful to have a list so nothing gets missed.
So how do you draft a will?
Most wills are written in certain ‘legal language’. If you’ve ever seen one before, it’s not as simple as writing a paragraph essay, there are certain templates to follow, like with drafting any legal document.
So, there are a few main ways to go about it. One is to write it on your own. There are softwares like “Nolo’s Quicken Willmaker” or “Rocket Lawyer” which may help with the template part of it, so your will is written like an actual legal document can still be proved in a probate court. The legal language part, you may have to do your own research or have your lawyer look over it to make sure it all checks out.
Another way is to hire an attorney or third party to draft it. This can be under $1000 to craft, given the complexity of your assets.
However, whether you write it yourself or use an attorney, you will still need two neutral witnesses (as in, non-family related) who will witness you sign and date the will, and then sign and date it themselves. You’ll also need to get it notarized, or in other words, have a notary (a public officer) to acknowledge it.
What Should You Know About Asset Protection?
Asset protection, on the other hand, focuses on defending your assets from any potential risks, such as lawsuits, creditors, and other financial challenges that may arise. With the right strategies in place, your hard-earned wealth can be protected from creditor claims, taxation, or seizure.
While ensuring your possessions are transferred after you’re gone is one priority, making sure they aren’t liable is another. Creditors will explore legal avenues from debtors to seek repayment, and this sometimes involves placing a lien on your possessions (like a property or a vehicle) as collateral if a debt isn’t paid. They can also explore repossession, foreclosure, or lawsuits in any case.
Let’s look at some of the ways one can defend their assets from creditors or other risks:
Your attorney can assist with each of these remedies to ensure that your assets are safely guarded from creditors and offer accurate legal advice regarding these matters. Consulting with an attorney is highly recommended.
Navigating both estate planning and asset protection can be an intricate process, but with the guidance of experienced professionals, you can gain peace of mind knowing that your financial matters are managed effectively and your legacy is secure.