Music fans in Pennsylvania may remember learning about the estate problems that occurred after the passing of Aretha Franklin and Prince. Neither singer had an estate plan in place, causing legal battles and frustrated family members. Those who have worked hard and planned for retirement also need to make end-of-life plans and organize their estate.
The first thing to do when making or improving an estate plan is to review the beneficiaries and designations. Some accounts, such as IRAs and 401(k)s, may be transferred to beneficiaries without costly and time-consuming probates. This can be done by simply filling out a beneficiary form. Back-up beneficiaries may also be added. Next, individuals should go over life insurance benefits. It’s important to have enough for funeral costs and end-of-life expenses. It is also a good way to pass the money onto loved ones without taxes.
There is a difference between a will and a trust. Most people should have a will in place before they die, but not everyone needs to have a trust. A will is sufficient in most cases with people who have limited resources. Those who do require a trust may be able to avoid probate by using one. Finally, individuals should not forget charitable donations when planning an estate. Charitable donations may be a good option to build into estate plans to decrease taxes and leave a lasting legacy.
Taking the time to plan an estate is an essential step in sharing finances with family and organizations after passing. Estates of those who pass without a will go into intestate, and the estate is then distributed according to the laws of the state. This may not reflect the wishes of those who passed away. An estate planning attorney may help an individual set up a will or trust before he or she passes away.