We all need to plan for the future and ensure that our families and loved ones are provided for after we are gone, but many of us continue to put off the process, or allow an outdated willto sit on the shelf. Scroll down to read more.
Having a sound plan for what should happen to your estate is an essential process for any adult; not only will it ensure that your assets are distributed in a manner you are comfortable with, it will also help to lessen the strain your eventual passing will put on your loved ones.
What Is Estate Planning And When Should You Perform One?
As a parent, estate planning is vital to safeguard the future of your children in the event of your untimely death and incapacitation. Unfortunately, one survey stated that only 16% of Americans have a will or an estate planning document, which is quite an alarming rate. Thankfully, estate planning is becoming more popular today, and it’s not too late to start yours as soon as you can.
Essentially, estate planning is a legal process that decides what happens to your wealth if you become incapable of preserving, maintaining, and managing it. Your estate will explain how your assets will be distributed, thus ensuring that they only go to your loved ones. Estate planning is perhaps one of the most important things to list down and accomplish before you die. Although estate planning is a huge green flag, this tough and technical process should be performed mindfully to avoid costly mistakes.
Read more for tips on how to avoid or address some of the most common issues people face when planning for the future.
1. Putting it Off Until it is Too Late
Very few people relish the process of estate planning – it forces us to confront things that, on any given day, we would rather not think about. Whether you are young, still feelperfectly fit and healthy, or feel that your family will cope with organising your assets after your death, it is incredibly important for any adult to make arrangements for their estate as early as possible. Unfortunately, many of the most difficult periods of our lives can happen unexpectedly. Putting off the process of estate planning risks only adding to the emotional upheaval for you, and your loved ones.
Once you’ve named the executor for your estate, your wealth can be in good hands. However, your executor, whether it may be your spouse or children, will have to obtain a Grant of Probate first. To guide your loved ones in claiming your wealth rightfully, look for certified legal experts, like Will Power, while you still have time
2. Not Being Aware of Your Own Estate
Your finances and assets are likely to be more complicated than you imagine, even if you consider your assets to be minimal, or shared jointly with your partner. Debts can make up a considerable portion of your estate – if you have a mortgage, for instance, this will impact your family’s lives after your passing.
Large portions of individuals’ estates can be overlooked if they attempt to make a plan for their assets on their own, without the help of a professional. Aside from being aware of your own estate, it’s also important to educate your family about what estate planning is, so they can also apply it to themselves, and most importantly, help them avoid or resolve an estate battle.
3. Not Making Lasting Powers of Attorney
There are two types of LPA – the first being Property and Financial Affairs, and the second being Health and Welfare. Having both in place will ensure that you and your estate remain protected should something unexpected happen to you later in life, rendering you incapable of making your own decisions. Anyone can be appointed as your attorney, provided they are over the age of eighteen, and capable of making these decisions on your behalf.
4. Never Reviewing it
In some circumstances, documentation for estate planning grows outdated, and in time it may begin to reflect certain relationships or desires you no longer want to be fulfilled.
For instance, if you find a new partner later in life, but never decide to marry, then a will that does not reflect this relationship may not entitle your partner to anything after your passing. If you live with your partner, but the relationship is not formalised legally, then they may have to go through the potentially lengthy and emotionally taxing process of an inheritance dispute in order to be recognised.
5. Forgetting the Smaller Details
When you consider what to do with your estate, the first things that spring to mind are likely to be managing propertyand finances, and, if they are still young, appointing someone to care for your children in a worst-case scenario. What many people forget, however, are the finer details. For instance, if you live alone, who do you trust to take over the care of any pets?
Your digital assets, such as online social media accounts, any investments into cryptocurrencies, such as Bitcoin, or digital content in the form of photographs, videos, and writing. Whether they hold financial or sentimental value, ensuring that you have preparations in place for their recovery is essential.
Even if you feel you can create a comprehensive will on your own without professional advice, mistakes or clerical errors could render it useless. For example, if a will is not signed or witnessed properly, this could be viewed as ‘lack of due execution’ at a later date, one of the legal grounds for contesting a will.
Failing to think about estate planning, or deciding that the level of your assets do not warrant any planning, is a common issue for many adults in the UK. It is, however, crucial that we leave our loved ones with up to date, clear instructions based on professional advice. Without which, they may face a much greater struggle when the time comes to sort your estate.