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Estate Planning

What Is Estate Planning?

Estate planning is a collection of tools that ensure an individual's assets are accounted for and disbursed to the appropriate parties in case of their death. Assets include various belongings such as homes, vehicles, valuable art, retirement plans, and outstanding debts. Additionally, planning involves minimizing tax exposure during the settlement period. Donating funds to charitable organizations is a popular way to reduce the amount of taxes paid.

Basics of Estate Planning

The primary step in the planning process involves setting up a will. It's advisable to do so in the presence of an attorney to ensure all legal ends are covered. Once a will is created, the individual typically sets up an account (or a trust) under the beneficiary. The next step involves explicitly naming the estate executor responsible for looking after the will's terms. It is imperative to seek the service of estate planning financial advisors to help you navigate the process.

Ensuring that Your Family is Protected

The major benefit of financial estate planning is ensuring your loved ones are taken care of when you are no longer here. Part of the planning entails finding the appropriate insurance coverage. It's crucial to understand what to ask a wealth advisor to get the ideal coverage for your spouse and children.

The two main factors to consider are finding the best coverage to reduce tax exposure upon your death and strategies to empower the next generation with your assets. It's, therefore, beneficial to get your children involved in the decisions being made early on. This helps in the smooth transfer of generational wealth. It's also helpful in the reduction of stress and anxiety.

Is Your Estate Plan Compliant With the State That You're Living In?

States have different estate plan laws. It's advisable to work with an estate planning wealth advisor to review your plan and ensure it is compliant. This review also helps assess whether your assets are well-positioned to avoid probate.

Would Long-term Care Save Your Estate From Erosion?

Long-term care for your parents can be costly and negatively impact the value of your assets. Including an insurance package to mitigate this is an effective way to avoid losses. Additionally, it's advisable to find effective approaches on how to talk to your parents about their wishes.

Having a professional manage your estate and portfolio helps ensure value is not significantly eroded by the impact of long-term care. Furthermore, the professional can help with liquidity management of the estate plan.

Divorced? It's Time To Review Your Estate Plan

Changes in your life situation such as a divorce can impact your estate plan. This typically means you have to restructure the distribution strategy for the inherited assets. Working with an estate planning professional near you helps you in keeping organized.

Our experienced team of advisors at Aveo Capital can assist you in the many considerations that go into crafting a well-structured estate plan. Get in touch with us today to begin the planning process.

Frequently Asked Questions

What Is the Difference Between a Will and Estate Plan?

A will is documentation of how you intend to distribute your assets once you pass away. It's one of the processes in estate planning. On the other hand, estate planning encompasses a much broader group of activities needed to ensure the estate is taken care of when you die. This involves setting up a will, and also takes into account the management of an individual's properties and financial obligations in the event that they become incapacitated.

When Should I Start Estate Planning?

The ideal age to begin estate planning is once you become of legal age. As an individual gets older, they accrue more financial and personal responsibilities that require safeguarding over a long time. Leveraging these planning tools will ensure your estate is in order once you die.

Who Needs an Estate Plan?

A formal estate plan is suitable for individuals keen on giving their assets to their loved ones once they die. This strategy is known as legacy planning. The documents ensure that your wishes are explicitly stated legally and concisely.

What Should Be Included in Estate Planning?

Estate planning includes the following components:

  • A will: This is an official document outlining the inheritors of your belongings once you die, guardians, and executor in charge of the contract's terms.
  • A trust: This dictates how your funds will be disbursed and are ideal for making sure to save as much as possible on taxes.
  • Trusteeship: This is the individual that will be responsible for making decisions for you in case you're incapacitated.

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