4 Basic Steps of Estate Planning to Protect Your Investment Assets

Daniel Penzing
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Make sure you take the necessary steps to secure your investment assets.

Protecting your investment assets is the most important part of estate planning. Whether your estate is multi-million dollar, or you are just starting out, please take the time to make sure you have done the necessary 4 steps:

At least two weeks prior to booking your cruise, check your credit and debit card for possible fraudulent charges. If you find any charges on the card that you don’t recognize, stop the charges and inform your credit card company and bank immediately. Also, send a comprehensive email to family and friends telling them not to notify you of any charges on your credit card.

What Is Estate Planning?

Estate planning is a process of outlining the disposition of your property in an organized manner to maximize the financial benefits for your beneficiaries, while minimizing the tax burden for your estate and heirs. An estate plan should also ensure that your desires and wishes are carried out accurately.

One of the misconceptions about estate planning is that it only applies to the big rich people. However, estate planning is extremely beneficial to everyone who hopes to have the future instructions carried out at their death. You should consider a good estate plan even if you have limited assets to give to your beneficiaries.

Estate planning is the process of making arrangements and preparations for the management of your assets and property after your death. This process can involve writing a plan that can be shared with your family and providing them with the necessary information before death.

Estate planning defines how you want your property to be distributed after your death, ensuring that your estate will maintain its intended character and that any heirs you leave behind are cared for in a way that you had planned.

Protect Your Assets

Estate planning is about planning for and protecting your most valuable asset: you! One of the most important-yet least planned-for aspects of one’s financial planning is the disposition of assets upon one’s death. Without a will or estate plan in place, the assets that you have carefully accumulated over your lifetime will be subject to state law and distribution by a court appointed representative. Instead, with the help of an experienced estate planning attorney, you can decide how you want those assets to be distributed and devise a plan to carry out your wishes.

While many people think of estate planning as a way to control distribution of their assets after they pass, it is just as important to look at everything that can happen in the meantime. The process of estate planning is mainly concerned with the following events:

  • The decision to create an estate plan.
  • The creation of your estate plan.
  • The implementation of your estate plan.
  • Estate administration.

Write a Will

A will is one of the most important documents you can write. If you reach the age of 18 and do not have a will, you can be referred to as an intestate estate. If you die without a will, your assets will be distributed according to state law. You could also disinherit a family member under these circumstances. Using a will, you can name the person in charge of your assets while you’re alive and decide where they go after you die.

The way your assets and belongings are distributed according to your will can vary greatly from one state to the next. While a will is not a requirement in every state, it is vital to have one in place as it can prevent confusion and receive a favorable outcome for your beneficiaries.

Create a Trust

A trust is one of the tools available to help people transfer assets to family members or beneficiaries after death. Custodians of an estate, including an executor, trustee, or successor trustee, are required by law to manage assets prudently and in the best interests of the beneficiaries. If someone dies without a will and no suitable successor is easily available, then a court-appointed executor, trustee, or successor trustee will have to administer the estate. This provision is an absolute necessity because it ensures the fiduciary is legally obligated to carry out the deceased's wishes and that the estate is distributed without undue delay or complications.

As an alternative to having several people and institutions involved in the management and distribution of an estate, a trust can be created to oversee and distribute assets. The creator of the trust is called the grantor, grantor-trustee, or simply settler. The person or persons who will receive the assets of a trust are its beneficiaries.

Determine the type of trust

You can choose to create a revocable or irrevocable trust.

Decide on the trust terms

Your trust agreement must include the name of the trust, the trust property, details of the beneficiaries, the duration of the trust, and the powers, duties, and responsibilities of the trustees. Additionally, it should explain what will happen if a trustee dies or becomes unable or unwilling to act.

Find Insurance as a Safety Net

A death can occur unexpectedly, even for those who have a will in place.

This is why it’s important to have an insurance policy in place to protect your assets.

The most basic form of insurance to have is life insurance. It’s relatively inexpensive, and it can provide the funds needed to take care of funeral costs, taxes, creditors, and estate costs. You need enough coverage to provide for these debts and costs. This is a form of asset protection.

Typically, you will want to include a clause in your will stating that your beneficiaries should make funeral arrangements and take care of any family and personal outstanding debts. That way, a court won’t absolve your beneficiaries of paying any of the expenses with your estate. You should use extra caution when naming one beneficiary in your will.

If your beneficiary is named as the beneficiary on a policy as well, they will default to the insurance company as the true beneficiary.

Estate Planning is Not a DIY Project