Estate planning is a process that allows the deceased to instruct how their assets are handled. An estate plan typically includes a will with an itemization of assets and a list of beneficiaries. An estate plan can also include a trust, executor of the estate, power of attorney and child guardian.
If it’s your first time making an estate plan, then it may be helpful to learn a few facts. Here’s what you should know:
Fact 1: Many people update their estate plans regularly
An estate plan can be altered. It’s wise to update an estate plan every few years to include new assets, investments and beneficiaries. Some people may need to update their estate plans more often than that. For example, an estate plan may updated to include a new spouse or to remove a deceased beneficiary.
Fact 2: There are many kinds of trusts
A trust is like a will, but it may avoid probate, estate taxes and disputes. People often make revocable trusts that can be altered at any time but sometimes they may prefer to make it irrevocable to protect assets from creditors.
Grantors can also make trusts to handle specific matters. For example, a pet trust could be used to secure assets for a pet’s needs and wants. Or, a generation-skipping trust could be used to give assets to grandchildren.
Fact 3: Handwritten wills can cause issues for heirs
One option when making an estate plan is to handwrite one. A handwritten estate plan or a premade template found online may be cheaper than getting legal help. However, handwritten and premade estate plans could create issues for heirs. For instance, a handwritten will could have errors that prevent the family from getting an inheritance and premade wills may not consider state laws.
It’s to the benefit of testators to learn about their legal rights when planning their estate. That way they can make an estate plan they can trust to work.