Research shows that 68% of Americans die without leaving wills. A will is an essential estate planning tool, yet many people never take the time to make theirs.
One of the basics of estate planning is creating a will, but you can also use other tools to plan your estate.
The goal is to protect your things and family, and one of the questions people often wonder about is their homes. What happens to your home and belongings when you die?
With an estate plan, you can predict and plan for what will happen. Here is a guide to help you learn the basics of estate planning if you haven’t started yet.
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Consider Your Assets and Family
As you begin learning about the basics of estate planning, you’ll need to start by considering your assets and family.
Do you have specific people in your life that you would like to give your things to after you die? Many people choose to leave their things to their kids. If you have kids, you might want to leave your things to them.
If so, how many kids do you have? Would you like to divide your things equally between them? If not, how do you want to divide your assets?
If you don’t have children, you might have close friends or family that could be your beneficiaries. You’ll need to think about this carefully before you begin planning your estate.
It’s also beneficial to think about your assets. If you don’t own a lot, an estate plan might not be necessary. If you have a house, though, you’ll need a plan.
One of the estate planning basics you’ll learn is that you must create a plan before you die if you want to have a say in what happens to your things.
Talk to Your Family About Your Home
After thinking about your things and family, it might be a good idea to speak with your beneficiaries about your house and things.
You might discover that one of your children wants to keep your house. You might also learn that no one wants your house. The way you handle your estate plan depends on what your beneficiaries want.
Considering your family’s desires and needs is one of the basics of an estate plan. You can help them avoid problems and challenges by considering their desires as you create your plan.
Decide the Best Route to Take for Your House
Next, you’ll need to learn more about the basic components of an estate plan so you can choose the right tools for your plan. Here are some options you can use to plan for your home after you die:
Use a Last Will and Testament
The most basic tool of an estate plan is a Last Will and Testament (also called a will). A will is a legal tool that you use to name your beneficiaries and state your wishes.
The downside to a will is that your family must go through the probate process, which is lengthy and costly. Your assets won’t instantly transfer to your beneficiaries without going through probate.
The benefit of a will is that you can include other instructions. For example, you can state your wishes for cremation or burial. You can also name someone to be the guardian of your kids if you have young children.
Create a Trust
A trust is also a common tool you can use when completing your estate plan. A trust is a separate entity that allows you to transfer your house and things to others without going through probate.
Using a trust simplifies the estate settlement process for your beneficiaries. When you make the trust, you place your assets in it. When you die, the trust makes it easy for your loved ones to take possession of all your things.
Add Your Beneficiaries to Your House Deed
If your home is the main asset you have, there is one other way to handle the transfer of it to your loved ones. If you have two children you want to give your house to, you can add their names to your house deed.
By adding their names to it, the house is already theirs. They won’t have to fight with a court to get the house. They will have immediate possession of it after you die.
This idea works great in many situations, but it doesn’t cover all the other assets and estate issues you must handle.
An Estate Plan Can Also Include Other Things
In addition to planning for the transfer of your home to your beneficiaries, you might have other items to transfer. For example, do you have vehicles, jewelry, firearms, or other valuable things?
If so, you’ll want to decide who you will give these things to after you die. Again, having a conversation with your beneficiaries can eliminate problems they might face after your death.
You can find out what items each person would like and include instructions on your will to accommodate these needs.
You might also want to include instructions for everything else you own. For example, you could include something on your will that states who inherits everything in your home. You can give it all to one person or many.
If you’re not sure how to proceed with your basic goals of estate planning, contact Johnston Shaw Inc for help. Creating an estate plan alone is not an easy feat, which is why most people hire experts for help.
The Basics of Estate Planning: Start Now
You might think you have plenty of time to plan your estate, but this isn’t always the case. Learning the basics of estate planning is vital, as it helps you realize that you should start now.
Using the right estate planning tools can help you protect your things and your loved ones.
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