Simply put, an estate is the sum total of everything we own. Planning for what becomes of our assets—aka estate planning, makes sense for everyone, ensuring affairs are in order for loved ones, and even laying out intentions and assets for our own care as we age. Estate planning experts provide a nuts and bolts overview of estates and estate planning.
Add It Up
It’s a mistake to think that estate planning is only for the affluent. The reality is, most of us have more than we may realize on a day to day basis. As Chambliss reminds us, estates include:
- Savings and checking accounts
- Retirement accounts
- Investments
- Life insurance
- Annuities
- House and other real estate
- Car
- Personal possessions, such as jewelry, furniture, and sentimental items
All of these are assets that comprise our estates—and need attention. Estate planning experts offer these pointers: “When you die, your estate encompasses all your property upon death. If you sold or gave away property before death, it is no longer part of your estate, and you cannot transfer it upon death. Items you own with another person are also part of your estate. Depending on the type of asset, it might automatically pass to the other owner. For instance, if you own a home with your spouse as tenants by the entirety, it will pass to your spouse upon your death.”
Estate Planning Explained
While it is typical to think of estate planning as making a will and our a trust, actually a lot more is encompassed in a well thought out plan. For example, depending on family circumstances, a comprehensive estate plan may include plans for minors or special needs individuals, plans for charitable giving, and, of course care plans for the capacity declines that may come with age. Chambliss provides these examples of what estate plans may include:
- Purchasing jointly owned property or adding a joint owner to your property
- Designating a beneficiary on a pay-on-death bank account, retirement account, or annuity
- Buying life insurance to benefit your family should you pass away
- Creating a trust for a child
- Obtaining long-term care insurance to cover future nursing home or assisted living fees
- Executing power of attorney documents, naming health care and financial agents
- Making a living will, providing instructions for care should you become incapacitated
- Preparing a transfer on death instrument to pass ownership of your property to a beneficiary upon death
These estate planning basics will help you move into further action. Of course when you do start working with an estate planner, you will need a handle on your assets, be they few or many, and these tips may come in handy too. Importantly, when you make an estate plan, you will designate a loved one, friend or professional to serve as your fiduciary. This person is generally referred to as an executor, trustee, or personal representative, depending on your circumstances and region. If you have minor children, it is also important to designate a guardian.
Regardless of the specifics of your estate plan, the fiduciaries you appoint have a legal responsibility to carry out your affairs, in accordance with the intentions set forth in your estate planning documents, like a will and or trust, and the law. When representatives are designated, fiduciary bonds, alternatively referred to as estate bonds, can be required as a safeguard for the interests of the estate and beneficiaries. Learn more about estate bonds right here.
At Colonial, a leading national provider of all types of fiduciary bonds, the steps to obtaining estate bonds and all other types of fiduciary bonds are easy: get a quote online, fill out the information, and enter a payment method. Print or e-file the bond from anywhere—even the law office.
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What’s Your Legacy?
Although we often associate estate planning with making arrangements to pass assets to loved ones, it’s actually a whole lot more. The acts of organizing our affairs and making decisions about how we can best care for ourselves and those we have responsibilities too, ultimately define and shape our legacies. Estate planners encourage us to think about how great it will feel to have Think for example, about how great it will fee to have all this accomplished:
- You can provide for spouses, children, and dependent family members….
- You can arrange your care and financial affairs should you suffer a severe accident or illness that renders you incapacitated.
- If you are a parent, you can nominate a guardian to care for and manage the inheritance of your minor children.
- If you own a business, you can prepare to transfer it to family members, colleagues, or other trusted individuals.
- You can make arrangements for your long-term care when you can no longer live on your own.
- You can also make funeral preparations, determine what happens to your body when you pass, and prepay for your funeral, all of which can help lessen the burden on your family members.
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