Even if you are still young and healthy, you should consider estate planning to help your loved ones handle your assets after your passing. Naturally, no one wants to think about their eventual death, but being prepared now will reduce the risk of arguments in the future. If you would like to keep reading, check out these three commonly asked questions about estate planning and administering.
1. Do You Need a Will?
A will is a legally binding document that details how you want your assets distributed after your passing. Many people also include where they want their private possessions to go, and some even describe the funeral they want. You can even include stipulations, such as not allowing someone to access the money until a certain age.
Not having a will doesn't mean your stuff will just be tossed in the trash, but it does open the door to someone contesting your wishes and can lead to arguments amongst your loved ones. However, it's important to have your will drafted and reviewed by a legal professional. They have the education and experience needed to ensure there are no loopholes that could be used by someone to contest the will.
2. What Is an Executor?
Whether you have a will or not, after your passing, everything you owned becomes your estate, and this estate is administered by an executor. If you have a will, it may list the executor, and in some cases, your family may agree to appoint one person as executor. In other cases, however, the executor can be a hired outsider.
An executor doesn't get everything, but they are in charge of distributing the right assets and belongings to the right people. Naturally, if there are beneficiaries listed and/or a will, this is much easier. Without a will, the executor has to rely on what others say and their own assumptions about what you would want.
3. What Happens to Debts?
Debt must also be handled after your passing. Before anything is distributed to beneficiaries, the estate pays any outstanding debt. This reduces the amount of money/assets your loved ones receive. If there isn't enough money in your estate to pay the debt, the creditors are out of luck. They may try to get money from your loved ones, but in most cases, they will fail.
Your loved ones will be personally responsible for debt if they are included on the loan. For example, if you have a credit card with a co-signer, the creditor may go after the co-signer to pay the bill after your passing. Similarly, if you own a house with your spouse and both names are on the loan, your spouse becomes solely responsible for the loan.
Planning for your passing isn't the most exciting pastime, but it is important, especially if you have specific assets you want to go to specific loved ones. Having a properly prepared will is one of the best ways to ensure your wants are met. If you would like to learn more or if you are ready to start estate planning, contact an estate administration attorney in your area today.