Many people spend an entire lifetime building assets for their loved ones to ensure their financial safety. But, have you ever given it a thought of what will happen to these assets on your sudden demise? Not yet? Then now is the time that you must start investing your thoughts in planning how your assets will pass down legally to your loved ones. And, so, we give you some important things you should know about estate planning:
What is Estate Planning?
Estate planning is passing of the assets or investments from one generation to another. It states how much of your estate belongs to whom after your demise. Your assets may consist of your properties, cars, jewellery, or financial investments. Estate planning is important to prevent family disputes. These disputes may hamper your family happiness and peace, which you would never want to happen.
Unlike common belief, you need not start thinking about estate planning during old age alone. Anytime is the right time for estate planning. But, before you get into it, here are a few things you need to know about estate planning.
1) Probate
Before you get into proper estate planning, you need to understand the role of courts in the entire procedure and the impact of probate on it. Probate is a legal term which is used to describe the court procedure to settle the deceased’s estates. The time taken to complete the estate distribution, and fees associated with it may vary from province to province. It may take years and some percentage of your estate’s value.
2) A will
Will is the legal declaration of your intentions concerning your property. It states the details of people who you wish should be the heir of your assets after your demise. A will can be prepared by anyone who is 18 years of age or older, has a sound mind, is free from fraud, or the influence of others. It is always beneficial to have a will, as it brings clarity in passing your assets, avoids disputes in your family, and prevents legal and financial griefs.
3) Heir of Financial Assets
All the financial assets that you have in your name has a nominee or an heir. In this way, the institution holding them knows whom to hand over your financial assets after your death. If your financial assets has a recipient, then it avoids probate. For instance, life insurance policy and retirement plans usually have an heir, who will be given its authority after your death.
4) Revocable Trust
Revocable trust in legal terms is a trust where provisions can be changed or canceled depending on you. In a revocable trust, the income earned during your life is handed over to you or the beneficiary after your death. If you ever experience serious health concerns, then revocable trust allows you to choose the beneficiary, to whom the amount accumulated on your name can be given.
If you are at a stage of life where you feel estate planning is your topmost priority, then we have got your back. Visit us at Prowse Chowne LLP, where we provide all the legal assistance you require in estate planning.