People can make estate plans in anticipation of their passing. Estate plans help instruct how their assets are handled. An estate plan can help reduce issues for beneficiaries.
Are you thinking about making an estate plan? It can help to learn a few facts about estate planning that may help you in the future:
Fact #1: Estate plans can be updated
It’s often important for people to update their estate plans regularly. A revised estate plan can include assets that were acquired after the making of an estate plan. Many people update their estate plans every two or three years. Some people update their estate plans earlier if they, for example, recently married or divorced or had children.
Fact #2: You can tailor trusts to your goals
A grantor can give a trustee assets to hold until instructed in a trust. A trust is a legal document that can provide more security than wills by avoiding estate taxes, probate and disputes.
The other benefit of a trust is that the grantor can tailor a trust to their wants. For instance, a trust could be made so that assets are only distributed to a beneficiary who intends to go to college. This can help ensure assets are used how the grantor intends.
Fact #3: There are several types of trusts
The most common kind of trust is a revocable trust. A revocable trust can be altered during the grantor’s life. When the grantor passes away, the trust becomes irrevocable.
A grantor can make other kinds of trust, such as a pet trust that’s used for the care of pets. Or, a generation-skipping trust could give assets to two or three generations younger than the grantor.
Fact #4: Dying without a legal will can cause issues
If the testator dies without a valid will, then they have died “intestate.” The state will then take control. Without a valid will to instruct the distribution process, the state may not administer the estate per the testator’s wishes.
If you’re making an estate plan, it may help to learn about your legal options.