3 Things You Should Know About Estate Planning
NEW YORK, October 6, 2021 (Newswire.com) - iQuanti: Estate planning is not just for the wealthy--everyone can plan for what happens to their assets and belongings after death. Everything you own is part of your estate, from your home, your belongings, your investments, and anything else that you own and is named by your estate.
Estate planning helps you decide what will happen to your estate after your time. You'll want to look into ways to shield your estate from taxes and ensure that you pass your legacy on to the right people at the right time, perhaps by using an irrevocable life insurance trust, or ILIT. Here are three things you should know.
1. Take inventory of everything that belongs in your estate
In other words, make a list with the name of the item or asset and its value. You'll want to account for two categories: tangible and intangible.
Tangible assets include physical objects and areas that you own, such as your home, land, vehicles, collectibles, and other personal possessions.
Intangible assets are the non-physical things that you own, including the cash in your bank accounts, the value of your investments, any intellectual property, and/or ownership of a business.
Keeping a record of your assets will help ensure that you can clarify exactly what is to be passed along to whom. An estate plan is also where you list your wishes for what happens to your children if they're minors and who can make medical and financial decisions on your behalf if you can't.
2. Consider a trust
A trust is used to create a robust estate plan while also minimizing estate taxes and having other benefits. The two main types of trusts to consider are revocable and irrevocable. Revocable trusts can be changed throughout your life.
If you become severely sick or incapacitated, your trustee can take over the trust and manage your assets for you. Then upon your death the assets are distributed to your beneficiaries as you intended. An irrevocable trust cannot be changed or revoked by the creator, but can provide different types of tax shielding and protection of your assets.
3. Life insurance can be an important part of estate planning
While the primary purpose of life insurance is to provide money to your beneficiaries when you die, life insurance can be used for comprehensive, integrated estate planning. In other words, it can help you find ways to protect your assets and ensure they are passed on to the right people in the right amount.
You'll want to consult with your financial advisor and/or attorney to find the right insurance strategy that will fit your needs, but it's certainly worth considering the life insurance route to estate planning.
The bottom line
Estate planning can help ensure your legacy is passed on exactly how you intend it. Life insurance companies offer a variety of tools that help you build and manage your estate while protecting its value and your wishes. Be sure to speak to a financial advisor and/or legal expert about your best options.
Source: iQuanti, Inc.