While financial planning can help you to build wealth over time, through the wise management of your resources, and retirement planning focuses on directing a portion of today’s income and assets toward tomorrow’s needs, your estate plan must to bring these strategies together in a comprehensive way. A well thought out estate plan can preserve and distribute the wealth, you have worked so hard to accumulate, to the next generation and beyond.
Everything doesn’t work out automatically
You may assume that there are laws on the books that will come into play if you pass away without any estate plan. The government will make sure that everyone that you love is properly provided for, right? In fact, if you die without a will or some other estate planning document like a trust, the condition of intestacy will result. Once your final debts are paid, the state will indeed determine who gets what. However, people that you love may be disinherited, because these laws are quite simplistic. When you plan your estate properly, with the help of our Charlotte estate planning attorneys, you can be certain that your own true wishes will be carried out.
Estate planning is relevant to young people
We all hear about people passing away at young ages, each and every day. You never know what the future holds, and you cannot be certain that you will have time to plan your estate as a senior citizen. As soon as you are a self-supporting, responsible adult, you should have an estate plan in place. This is true for single people, but if you are married, or if you are a parent, estate planning is an absolute must.
A will is not the only option
Many people equate the process of estate planning to the creation of a last will. In fact, a will is not the best choice for many people. If you use a last will to state your final wishes, the inheritors would receive lump-sum inheritances. Everyone is not a good money manager, and this can be disconcerting if you have a spendthrift in the family. To respond to this, you could create a revocable living trust and use the trust as the centerpiece of your estate plan instead of a will. Under a revocable living trust you do not lose control of the assets while you are still alive, so you do not have to be concerned about others being in charge of the assets you placed in the trust. A living trust is one option, but there are many different tools in the estate planning toolkit. You should explore the possibilities with an experienced estate planning attorney to make a fully informed decision.
Benefits of a living trust
When you use a last will as your asset transfer vehicle, you would be allowing for the distribution of lump-sum inheritances to the inheritors. This can be a source of concern if you have someone in the family who is not great at handling money.
To make sure that this individual would have resources to draw from over the long haul, you could create a living trust. While you are alive and well, you could act as the trustee and the beneficiary, so you would continue to control the assets.
Naming a successor trustee
When creating a revocable living trust you name a successor trustee to take over the trust administration duties after you are gone, and you name a successor beneficiary who will receive your assets. It is possible to name an individual that you know personally to act as the trustee, but many people will use a professional fiduciary such as a trust company.
In the trust declaration, you can leave behind specific instructions about the way you want the assets to be distributed to the successor beneficiary. For example, you can instruct the trustee to distribute a certain amount each month.
Planning for capacity, as well
Another advantage that you gain with a revocable living trust is the ability to account for incapacity. Unfortunately, many elders become unable to handle their own finances, with Alzheimer’s disease being a leading culprit. In the trust declaration, you are able to empower a disability trustee to administer the trust, in the event of your incapacitation.
Join us for a free seminar today! If you have questions regarding estate planning matters, please contact the experienced attorneys at The Potter Law Firm for a consultation. You can contact us either online or by calling us at (704) 944-3245 or for individuals in Kentucky at (606) 324-5516 (Ashland, KY) or at (859) 372-6655 (Florence, KY).
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- When Should You Use an Irrevocable Trust? - June 24, 2020
