Legacy, Bequests and Preparing Your Assets
At one point or another, everybody will have to take some time to think about how they want to distribute their estate in the event of their death or incapacitation. Though there are legal mechanisms in place to address estate matters if one dies without a will, the cleanest, clearest and most personalized way to manage your assets and debts after you’re gone, is through a will.
What Is Your Estate?
Your estate is everything you own and everything you owe. It is the collection of everything you’ve bought, what you’ve got now for what you once sold, and of course, all your debts.
Estate planning, then, is planning how your estate will be handled in the event of death or incapacitation. Your assets and debts will be inventoried in detail. Every piece of real and personal property will be indexed and accounted for. The default beneficiaries will be mapped and listed, as will all creditors or other lenders who may be owed.
Planning Your Estate
Your will describes how to dispose of your assets. You have a lot of freedom in how you want your assets disposed of. The will’s language can be very specific or more generalized. The document will map out your beneficiaries, the assets you want distributed to those beneficiaries, and how you want them distributed. This includes any assets you’d like to see distributed to charity or elsewhere.
Your preferences will be recorded exactly as you wish in your will. However, please keep in mind that your estate must first be used to pay off your outstanding debts, and taxes.
A big part of planning your estate is selecting an executor to oversee the proper distribution of your assets. Most people tend to choose someone close to them, whom they trust, and who may already know the ins and outs of their estate.
Some people may select a professional executor with experience in overseeing estates, and knowledge of finance or matters related to real estate. If a professional executor is chosen, it may be a good idea to get them as familiar with the estate as possible while you can.
Other Areas Covered in a Will
Your will may also arrange for the preservation and future distribution of property. A will may also create trusts created for the beneficiaries, and name trustees to oversee the trusts. Some wills may include incentive-based trust disbursement provisions, where eligibility is contingent on the performance of a specific task, such as graduation from college, reaching a certain age, or marriage.
If needed, a will can also cover guardianship of minor children or other dependents and detail the financial provisions for their education, healthcare, and support.