It may not be pleasant to think about, but most adults should have some sort of plan for handling their assets after they’ve passed on. Any outstanding debts that may be present could be eaten up by the funds in your current bank accounts or investment savings. Your surviving family members may also be held responsible for paying these obligations.
The older you get, the more important it is to have a plan in place for your assets. Try to pay off any car loans, mortgages, credit card balances or other bills in a timely manner. Paying them off on time or even ahead of time can save you plenty in terms of interest and other fees later on.
Another good idea is to establish an estate. An estate will take effect after your death. Consulting an estate planning attorney can help you draft the necessary legal documents. You can also identify the sources of any inheritance or estate funding, decide who you do and don’t want your assets to go to and start naming beneficiaries.
Here are a few important tips to help protect your heirs once you die:
- Write a will. One of the first steps you’ll need to take is drafting a will. This can be as simple or complex as you’d like it to be. A will clearly specify how your assets are to be handled in the event of your death. This is a legally enforceable document that allows you to distribute money and other important possessions to the people that you choose. Creating a will is something that can be done in a matter of a day or two.
- Establish a trust. If you have more substantial assets, such as property, vehicles, buildings or other large assets, you should consider creating a trust in order to protect those assets. There are different kind of trusts that you can set up:
– A living trust is set up while you are still alive. They can either be revocable (meaning that you can make changes or even cancel it if you decide to) or irrevocable. In the event of your death, the proceeds of the trust would be disseminated without being subject to probate.
– A testamentary trust is established once you’ve passed on. It’s funded by your assets or other proceeds (including life insurance) upon your death.
All trusts are good ways to protect your assets from unreasonable claims. All trusts should be established with the assistance of an attorney, to ensure they comply with both state or federal laws.
- Consider your insurance options. Besides life insurance, you may want to think about other types of insurance coverage. You may have existing health, disability, auto or other existing coverage policies. Adding additional plans or extra coverage can help to protect your assets in the event of your death. Business insurance can be especially important if you own your own company.
These are just some of the many ways to protect your heirs after you’ve passed on. Take some time to carefully consider your options and consult an attorney or financial planner so that you understand your options and can decide on a plan that best meets your needs. Taking proactive steps now to protect your loved ones can save them a lot of stress and worry after you’re gone. They can go on living their lives to the fullest.