As we get older there are just some things that we don’t want to have to think about. Planning or mapping out a future that exists after we are gone is definitely one of those things. It can be hard to think of your loved ones going on without you being there with them, but the possibility sadly does exist. One of the best ways to plan for the future is to put together a will or living trust for yourself.
What is a will?
Legal zoom defines a will as, “a document that lets you, the testator (the person making the will), designate individuals or charities to receive your property and possessions when you pass away. These individuals and charities are commonly referred to as beneficiaries in your last will. A last Will and Testament also allow you to name a guardian to care for minor children. The main purpose of a will is to ensure that the testator’s wishes, and not the default laws of the state, will be followed upon the testator’s death.”
What is a living trust?
A living trust is a document that can be used prior to a person’s passing. If a person is sick and has a living trust, then a trustee can act on that person’s behalf. With a living trust, the information that is within the document is private from public knowledge, which is not the same with a will. The other difference with a living trust is that your assets will not be put through probate, which can be a headache for a lot of people once a person passes and a will is read. Living trusts are not just for wealthy people, even though a lot of people assume that they are.
Having a land trust
If you have had a home in your family for many generations, or a house that you would like to acquire specifically for your dependents, you may want to get a land trust. You can leave a piece of property in anyone’s name and if something changes in the future, you are able to change that private land trust or who receives the property.
What happens to your minor children after you pass?
If your spouse is still living, then your child or children will remain with their living parent. In the case that the father’s name was not put on the birth certificate, or you weren’t married to their father once you’ve passed, then that is a different story. When making a will you have the opportunity to say who you’d like your child or children to be raised by after you are no longer here to care for them.
In the case that you did not appoint a person as your children’s guardian, and your spouse is not living, then your child becomes a ward of the state. In this case, if a will, living trust, or an estate exists, then that minor child or children can be taken to court with the trustee or estate executive and they can be appointed guardian. If a will or some form of a document doesn’t exist for the welfare of your child after you’ve passed, then the court will step in and appoint someone to be your child’s guardian or your child may be put into the foster care system.
What are the steps to estate planning?
• You’ll first have to make a will
• Set the beneficiaries
• Deal with estate and gift-tax exemption
• Draft a letter to go with the will
• Appoint a power of attorney
• Write up a medical care plan (a plan for your wishes towards the end of your life)
• Get together any files that might be important or connect to your estate
The process of a will or living trust is a way of financially setting up your family for a future without you. Taking the steps to make sure that your family won’t be financially strapped after you have passed is a great thing. Now is the time to get your life in shape financially. See a professional if you have questions.
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