Whether wealthy or not, everyone needs to think carefully about estate planning.
Typically, death isn’t a comfortable topic for discussion, and thoughts about what will happen to your belongings after death can be overwhelming. By taking the time while you are alive and well to think through some of these difficult decisions, you can help to reduce the chances that your family will be taken advantage of when it comes time to deal with an emotionally charged issue like your estate.
No matter how great or how few your assets, creating an estate plan (which includes items such as a will, living trust and living will) will help you organize and distribute your money and belongings to the right people and places.
BBB offers the following guidance on the basic components of an estate plan:
At the very least, anyone who has assets they would like to pass on to specific individuals should create a will. A will can allocate assets as well as establish guardianship of children. Most wills have to go through probate after the individual’s death. In probate, a court oversees the payment of any debts and distributes inheritances - the process can last several months.
While a trust might sound like something only wealthy people need, it’s actually a tool for anyone who would like 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 does not have to go through probate - unlike a will. Examples for creating a trust include wanting to give a child their inheritance over time, rather than in a lump sum, and restrict how the money can be spent.
A living will provides a way for an individual to communicate their desire for life-saving measures in case they are incapacitated. In addition to a living will, individuals can also assign medical power of attorney to someone they trust, who can further ensure that their wishes are fulfilled.
Be cautious when you decide who will be involved in the creation of your estate plan; this process involves a great deal of personal and financial information. You need to have confidence and trust in the lawyers, estate planners, accountants or others who will be involved in organizing your needs. BBB advises researching any estate planning companies or lawyers first at mbc.bbb.org before paying for their assistance.
For more advice you can trust from BBB on managing personal finances, visit mbc.bbb.org
SEPTEMBER 2009 - VANCOUVER ISLAND
SEPTEMEBER 2009 - VANCOUVER & LOWER MAINLAND
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