Estate planning isn’t only for the wealthy, nor is it a topic people enjoy thinking about. However, the Better Business Bureau advises that if you own something of value you want to pass on to family or loved one, you need to create an estate plan.
Your BBB offers the following guidance on the basic components of an estate plan and advice on choosing what is necessary for different situations.
- Will
- Anyone who has assets to pass on to specific individuals should create a will, which allocate assets and establishes guardianship of children. Most wills go through probate after an individual’s death. In probate, a court oversees the payment of any debts and distributes inheritances — the process can last several months.
- Living Trust
- While a trust might sound like something only wealthy people need, it’s actually a tool for anyone who wants to set conditions on how and when their assets are distributed. A trust can also help reduce the amount of taxes paid on the inheritance and it does not have to go through probate. A trust is good idea if you want to give a child his or her inheritance over time rather than in a lump sum and restrict how the money is spent.
- Living Will
- A living will provides a way for you to communicate your desire for life-saving measures in case you are incapacitated. You can also assign medical power of attorney to someone you trust who to ensure your wishes are fulfilled.
For simple estates, many Web sites offer an inexpensive do-it-yourself approach to creating a will; for more involved estates, it’s best to enlist the help of a lawyer. The BBB advises researching any estate planning companies or lawyers before paying for assistance.
After creating an estate plan, communicate the terms of the plan with family members and loved ones. An estate plan should be revised every time the individual moves, changes marital status or is affected by major financial changes, such as investments or buying or selling a business. An estate plan will also need to be reviewed if anyone the estate plan affects undergoes major life changes such as marriage or death.
Start With Trust. For reliable consumer tips and information, and lists of Accredited Businesses that provide Estate Planning and Financial Consulting, go to wynco.bbb.org or call 970-484-1348 or 800-564-0371 for reliable consumer tips and information.