Estate planning can get rather complicated due to tax laws and the various different forms that your assets may be in when you are making your plans. This is why it is a good idea to retain the services of an experienced estate planning attorney from the outset. There is no reason why the layperson would be aware of all of the options that are available. So when you “go it alone” with the help of some type of DIY software that you found on the Internet your frugality could in fact wind up costing your heirs a great deal of money in the long run.
This having been emphasized, when you do sit down with your estate planning attorney you will find that he or she will make some suggestions that are simple and straightforward. Though it is true that certain situations call for some rather sophisticated financial instruments, there are a number of simple tools that can be inculcated into your estate plan as well. One of these would be pay on death accounts, which are sometimes referred to as transfer on death accounts.
You will find that most banks offer POD accounts, and there are a number brokerages that provide this option as well. When you open the account you name a beneficiary. In the event of your death, the beneficiary assumes ownership of the assets in the account and this transfer takes place quickly and efficiently outside of the process of probate. In addition to the ease of transfer, these accounts provide flexibility because you can change the beneficiary or even close the account if you’d like to at any time.
The other straightforward but effective estate planning tool that we would like to mention is life insurance. Having sufficient coverage is important, especially when you need an income replacement vehicle, and it plays a significant role in many estate plans. As your life situation changes, you should always reevaluate your coverage and your beneficiaries to make sure that they are appropriate given your current family dynamic.
- Preparing for Coronavirus - March 10, 2020
- Incapacity Planning - December 20, 2018
- Special Accounts for People with Special Needs - December 17, 2018