Creating a thorough estate plan is crucial to ensuring that your estate and your loved ones are as financially protected as possible under the circumstances. By creating wills and trusts, you can make sure that your assets are passed down in accordance with your wishes. Utilizing powers of attorney and health proxies can help ensure that your best interests are protected in the event that you are suddenly incapacitated and unable to make decisions for yourself.
While much of estate planning is about determining how to handle one’s assets, it is just as important to consider your debts. Depending on the circumstances, debts may be dealt with in one of a number of ways. Generally speaking, many debts, like credit card debt, dies with the account holder. However, these debts are usually repaid from the estate. If there is not enough value in the estate, then the debt is forgiven. On the other hand, debt that is held jointly with another will still be owed by the living debt-holder.
So what does this mean for the estate planning process? To start with, it means that beneficiaries and estate administrators need to be informed of estate debts. Also, those creating an estate plan may want to think about how to protect their assets from creditors. Certain trusts are untouchable by creditors, which could help ensure financial benefits for your beneficiaries when that money would otherwise be used to pay debts.
Therefore, estate planning can be critically important to your family’s financial future. There are a number of estate planning tactics, but many of them are particular to specific circumstances. So, those who are engaging in estate planning need to make sure that they have a thorough plan in place as soon as possible. To learn more about the estate planning options that are best for you, you may want to think about discussing the matter with a skilled legal professional.