Many people believe that estate planning is only necessary for people with a high economic level. In reality, it is essential for everyone to have a basic plan to protect the estate, regardless of income or the full value of the estate. We all want to minimize the confusion, unnecessary expenses and stress of loved ones after their disability or in case of death.
Did you know that without proper planning, your assets, such as real estate, retirement plans, and bank accounts, can end up in limbo for many years?
– We should all consider the following three elements:
- Keep our Will or Trust up to date.
Wills are easy to create, but require the essential distribution of the estate’s heirs to go through the probate process. The protocolization process is a legal process that involves the following:
- Validate the will and designate an executor or personal representative to legally administer the deceased’s assets.
- Identify, inventory and evaluate the property of the deceased person.
- Pay debts and taxes.
- Distribute the remaining property to the beneficiaries as stipulated by the trust.
-The Protocolization process often requires a large amount of technical paperwork and court appearances. The other judicial aspects and fees made by the court are paid by means of the patrimonial property, said process reduces the economic amount and patrimonial properties that are passed to the heirs.
-A trust has many benefits that a will cannot provide. First, when properly structured, the trust helps prevent guardianships if you become disabled. And conversely, a will only works after death and doesn’t work like a disability plan.
-The process of trusts usually avoids testamentary trials, and in this way helps the beneficiaries to access the assets more quickly, as well as saving time and legal costs. Depending on how the Trust is structured, it can also help reduce estate taxes and protect beneficiaries from creditors.
- A Durable Power of Attorney
-A Durable Power of Attorney is a written authorization that allows a second person to make financial and legal decisions for the person who is hospitalized or disabled.
-Not all legal powers proceed in the same way. A power of attorney can become valid immediately after it has been signed or shortly after. The great advantage of a “Durable Power of Attorney” is the fact that it will continue to be valid during or after your disability.
-The legal powers of ownership should only be granted to trusted persons, and especially to those who have the knowledge of the administration of financial and legal affairs. A medical power of attorney can be given to someone else to make medical decisions for you in case you become disabled.
- Update of the Designation of Beneficiaries Forms.
-The forms of designation of beneficiaries in life insurance, 401 (k) accounts, bank accounts and other assets, generally nullify the provisions in conflict within a will or trust. It is vitally important to ensure that all forms or applications are reviewed and updated periodically, if possible annually.