November 02, 2021
Estate Planning FAQs
Life is unpredictable, and along with the good times, there are many bumps along the ride. Estate planning helps you preserve and grow your assets while alive and distribute them between your heirs after your death. When preparing a proper estate plan, many things are considered, like your living condition, marital status, number of dependents, and wishes. If you are thinking of estate planning, you should familiarize yourself with the commonly used terms to make better-informed decisions and clearly understand the process.
Check out these frequently asked questions about estate planning you should know about-
What are the Tools of Estate Planning?
- Last will: Wills are the most important documents required while creating an estate plan. It includes your requests that need to be fulfilled after your demise and your intentions for the assets. You can name your heirs in a will and specify if you want to exclude someone.
- Trusts: A trust can be established for complex properties. The trust is entitled to manage the assets included in it until they need to be distributed. It is also an excellent way to reduce federal estate taxes and avoid probation.
- Power of Attorney: If you become incapacitated to make decisions for your finances, you can sign a power of attorney and give the power of management and judgment to someone reliable. You can also create a healthcare power of attorney to allow someone else the ability to make decisions regarding your medical treatments on your behalf. However, a power of attorney should be created before the principal is declared legally incapacitated.
- Life Insurance: It is the best tool to include in your estate planning. It provides quick, tax-free income to your loved ones and dependents after your demise without liquifying your assets. It also avoids probate during asset distribution.
What are Testate and Intestate?
Testate is a condition where the deceased has a written legal will, and the document is presented in front of the probate court. In contrast, the intestate situation occurs when there is no will available to show in the probate court. In such a case, the probate court orders a representative who carries out all the tasks of an executor and accomplishes the asset distribution. All the charges are paid through the estate in both conditions.
Is Probate Avoidable?
Probate is the court-supervised legal process that authenticates asset distribution after someone’s death. If you only have a will, the probate court will consider testate laws and complete distribution. In the case of an intestate, the probate court will utilize local or state intestacy laws.
However, probate can be a long and tiring process for your loved ones to go through. You can avoid probate by using various estate planning tools such as life insurance and trusts.
What is Joint Tenancy?
Jointly owned properties or joint tenancy usually occurs between married couples. If one of the partners dies, the other automatically gets the authority of all the property owned together. It is generally advised not to opt for joint tenancy. Otherwise, create one with someone trustworthy.
About Castle Wealth Group
Contact Castle Wealth Group for all your estate planning needs. We build a perfect strategy for your retirement, including income planning, investment planning, tax planning, health care planning, and legacy planning. Visit our website or call us at 844.885.4200 or email us for your financial advice.