Protection of assets is crucial for many people. They want the surety of leaving behind their fortune in hopes of it going to the rightful owner.
Estate planning sounds typical and complicated. However, it is essential for people who want to ensure they are taken care of according to their will.
If you don’t develop a plan today, your children or family may suffer the consequences.
Fortunately, there is more than one way to safeguard your assets and ensure they pass down to the right people after your death. Following are a few useful tips to protect your assets:
- List down your assets:
To ensure that your assets are well-protected after your death, you first need to know what and how much you have. You need to make a complete list of all the valuable items inside and outside your house which can account for your fortune.
These can be anything from jewelry to property and even collectibles. After these, you should follow up with non-physical assets, including non-tangible assets such as life insurance, brokerage accounts, health insurance, life insurance, etc.
You should be thorough with your list and your assets’ details; you should also pen down important account numbers, their location, information of firms holding non-physical assets, and important documents.
- Draft a will in your lifetime:
Every person has the right to have their assets transferred down to the people they care for. By typing in the term wills and estate planning near me on Google, you’ve taken a positive step towards ensuring the safety of your assets by finding reliable and experienced professionals for drafting your will.
But the million-dollar question here is, why do you need a will? Most people assume that only those with Elon Musk-sized fortune draft wills and think about estate planning.
However, it becomes extremely difficult for people to handle a person’s financial affairs after they die if they hadn’t drafted a will in their lifetime.
A will guarantees you and your family that assets are transferred to the right people according to your wishes.
Ensure that you follow the proper procedure for drafting a will and disclose its content and location to relative people.
- Look towards joint ownership:
Joint ownership means that an asset is held equally between the partners/parties. This means that upon the death of one of the partners, the surviving partner will automatically receive the remaining half of the asset.
Why is joint ownership a great way to protect your assets? The biggest benefit of joint ownership is that regardless of what’s in the will, those assets will still transfer to the other owner.
It is a sure-fire way to ensure that the assets aren’t disposed of anywhere else, even if someone tempers with the will, because joint ownership assets cannot be challenged.
You can not only keep your most valuable assets safe but can also shelter them from inheritance tax, bankruptcy proceedings, and more.
- Look into trusts:
One of the most effective strategies to safeguard your assets is to quarantine your assets into a trust. This means that you’ll be in complete control of when and how your assets will be distributed to the right beneficiaries after you pass away.
You can use trust in combination with a will, while trusts often help avoid probate and minimize taxes. A trust during your lifetime means that you can use those trusts, and since you don’t own them, they are immune to many financial restrictions and challenges.
There are two common types of trusts, i.e., special needs trusts and caring for minor children. The special needs trust constitutes funds for a dependent with a disability, while the caring for children trust is established for children whose parents pass away before they turn 18.
- Complete and organize necessary paperwork:
One of the biggest challenges your dependents may face regarding asset transfer is not having the right or complete documents.
If your family can’t find your will, your life insurance documents, or even the 401(k) statements, what’s the use of safeguarding your assets?
One of the best things you can do is ensure that your assets are dealt with according to your wishes. Apart from keeping the important paperwork safe, be mindful of regularly reviewing and updating them.
It’s best to review your documents after major events in your life or at least once every two years. Keeping important paperwork in a safe place is satisfactory as long as it is the right place.
- Designate a power of attorney:
Assigning a power of attorney allows you to designate someone who can deal with your assets and other financial matters on your behalf.
Appointing someone you trust to make decisions when you are incapacitated removes your loved ones from the trouble of going to court for the simplest of estate matters.
The types of power of attorney you can consider for asset protection include a financial power of attorney, a living will, and a health care power of attorney.
A financial power of attorney allows a person to manage finances. In contrast, a healthcare power of attorney can make critical decisions regarding your health when you cannot communicate your wishes.
- Talk about your estate planning:
It is in your best interest to let your loved ones know about your estate plan. Talking and updating them about it will prepare them to deal with your assets once you are gone.
Not only loved ones, but it is also crucial that you discuss your will and plans with concerned personnel such as agents or executors.
One of the best ways to ensure that your loved ones don’t have a hard time managing your assets after your death is to leave detailed instructions about documentation and the legal procedure.
It’s difficult to imagine that your hard-earned money can go to waste after your death if you don’t take steps today to safeguard it. There could be various legal issues regarding the safety and distribution of your assets after your death if you didn’t leave proper instructions behind.
It is essential to keep a few important tips in mind, which can help you manage your financial matters, especially after you pass away.