Estate planning is not just for the rich and famous, and it’s high time we bust that myth. We all have assets we’ve accumulated over time, and it’s only fair that we take control of how they’re managed and distributed after our demise. Whether it’s a property, a beloved painting, or even a sentimental piece of jewelry, each item holds a certain value that cannot be measured in mere dollars and cents. Puai Wichman notes that estate planning allows us to determine how each item should be dealt with, ensuring that our loved ones receive what we intended. Plus, it doesn’t stop there. Estate planning also considers unforeseeable circumstances like incapacitation and provides a roadmap for managing our financial obligations when we cannot do so ourselves. So, it’s not just about who gets the yacht or the mansion; it’s about having the peace of mind that comes with knowing everything is taken care of, just as you intended.
An individual’s estate consists of all their assets, from their beloved car to investments in stocks and artwork. Not only does estate planning help preserve family wealth, but it also allows individuals to ensure their surviving spouse and children are cared for and can even provide for future generations’ education. While planning for our legacy may be daunting, the peace of mind it brings is unparalleled. We can choose our life insurance beneficiaries, designate beneficiaries for pensions, and even leave behind a charitable gift.
The most basic step in estate planning involves writing a will, which provides instructions on how your property and custody of minor children (if any) should be handled. Puai Wichman explains that this legal document is the foundation of your estate plan and allows you to express your intentions clearly and name a trustee or executor who you trust to fulfill your wishes. In addition to outlining how your assets should be distributed, your will can indicate whether a trust should be created after your death. Whether it’s a living trust that goes into effect during your lifetime or a testamentary trust that takes effect after your passing, it can be a valuable tool to protect your assets and ensure they are used as you intended.
Probate is a legal process that ensures the authenticity of a will and serves as the first step in administering an estate. It is a court-supervised procedure that verifies the validity of the last testament of the deceased. The executor named in the will is appointed by the court, granting them the legal power to distribute assets to the beneficiaries. It’s important to note that the custodian of the will must take it to the probate court or the executor within 30 days of the testator’s death. The probate process may seem complex, but it ensures that the deceased’s wishes are carried out fairly and lawfully. The legal system ensures that a person’s final wishes are acknowledged, honored, and respected through probate.
Aside from the obvious task of creating a will, there are several other important steps to consider. One of these is establishing trust accounts in the names of beneficiaries to limit estate taxes. Puai Wichman points out that this protects your assets and ensures they go to the right people. It’s also important to name a guardian for any living dependents and an executor of the estate to oversee the terms of the will. Another step is creating or updating beneficiaries on plans such as life insurance, IRAs, and 401(k)s. However, other lesser-known steps can further benefit your estate, such as setting up funeral arrangements, annual gifting to qualified charities, and a durable power of attorney to direct other assets and investments. By taking the time to handle these tasks, you can have peace of mind knowing that your estate will be well taken care of.
Puai Wichman is the founder and CEO of Ora Partners, an international trust provider and wealth management firm dedicated to helping families and individuals protect personal and corporate wealth.