If you want to control how your possessions and savings will be distributed after your death, you need to understand the basics of estate planning. More than anything, you need to understand how to execute a legal will. According to the American Bar Association, estate planning means getting the advice and expertise of a lawyer, financial planner, accountant and other professionals who can guide you through the process of making a will or setting up a trust for your assets.
A will is a written document that describes how you want your property distributed. In your will, you will need to appoint one person as an executor, who will serve as your representative and take responsibility for carrying out the instructions you leave in the will.
Working with your lawyer and financial advisers, you will evaluate your property and other assets and determine what you want to leave to each of your heirs. In some cases, state law may require you to leave minimum percentages to a spouse. Your lawyer can help make sure your will meets legal requirements.
If you cannot afford an attorney, free estate planning services may be available. Senior community centers and legal-aid societies are frequent sponsors of these services.
Many people turn to living trusts and other financial vehicles to avoid “going through probate.” Probate is often perceived as a difficult process that delays heirs from getting their inheritance, but many states have simplified the probate process.
Land or buildings you own with another person may include “rights of survivorship.” In this case, the property will go to your partner, not your heirs. Similarly, bank accounts used by business partnerships may have rights of survivorship. If you have named beneficiaries for your life insurance policies or retirement savings accounts, any proceeds from those will go to the named beneficiary.
In addition to distributing property, a will is the forum for some other decisions:
1) guardianship of minor child
2) provisions for disabled relatives
3) creation of a family or charitable trust
When a person dies without a will, state law determines who gets the property. In most states, the estate is divided among a spouse and children or other family members. The percentage that goes to each family member is determined by state law.
Keep in mind that your financial status and property may change after you write your will. Don’t hesitate to revisit the document and make changes. Check with your lawyer and financial advisers to make sure the changes are legal.