Most people in Chester, Pennsylvania, may think that creating an estate plan is only for wealthy people, considering the substantial amount of assets, properties and income involved. However, estate planning is not limited to wealth protection and distribution. Estate planning may also address many end-of-life issues, which may be available for average families.
While an estate plan often involves trusts, powers of attorney and wills, each estate planning tool has a different function in the event of death. Living trusts and wills are written documents. A person can include in a will how the property and valuables should be handled upon death.
Wills allow a person to transfer all the property upon death, while trusts assign the distribution of assets to a trustee. The trustee will manage the property for the benefit of the person's beneficiaries. Living trusts allow the creator of the plan to control the assets placed in the trusts while the person is still alive.
An estate plan is also essential for parents because it allows them to choose a guardian for their children when both spouses die. Designating an executor, who is the person who will carry out the instructions in a will, should be considered as well. In doing so, the asset distribution and management can be handled in accordance with the person's wishes.
Creating an estate plan should also include the probate process and taxes. An estate plan undergoing a probate court can be costly and long-lasting for the loved ones, while estate taxes and an inheritance may pose disadvantages for the beneficiaries.
Planning ahead when it comes to the end of life is usually difficult. Nonetheless, death is certain, and without an estate plan, the financial well-being of the family and other beneficiaries are left unsecured. Taking that into account, estate planning is beneficial for Pennsylvania residents, regardless of their career and earning power.
Source: Kitsap Peninsula, "Estate planning: Preserving wealth not just for the 1 percent," Daryl D. Hembry, Oct. 1, 2013