Estate planning is not for everyone.
Estate planning is for responsible people who wish to continue caring for their loved ones even after they’ve passed on. If you think you belong to this group, continue reading.
There are 4 important factors you must consider when you’re planning your estate.
Who Are the People (or Organizations) that Matter Most to You?
Do you have someone or some special organizations (eg. charity) that you want to support beyond your lifetime?
If yes, how long do you want to provide for them in event of premature death?
A qualified Financial Planner who is trained in estate planning would be able to help you work out your financial numbers.
Do You Have Any Outstanding Liabilities?
In the event of premature death, your outstanding liabilities will fall on the shoulders of your next-of-kin.
Examples of such liabilities may include the following:
- Mortgages
- Bank loans
- Credit card debts
- Other unpaid bills (eg. medical expenses)
You should ensure that your own financial burdens are not passed to your family members.
Do You Own Any Overseas Assets?
These may include land, property, shares of a foreign company, etc. In event of premature death, will depending on the local laws of the respective country, your family members might be required to make tax payments to take over your overseas portfolio.
This can be problematic if the tax amount is greater than the value of your overseas assets. You should consider engaging a local legal expert to help you avoid the unnecessary tax and legal implications.
How Much Legacy Do You Want to Leave for Your Loved Ones?
This is where your investments and insurances you acquired over the years will bear fruit.
A Financial Planner who is experienced in Estate Planning can help you calculate the value of your assets including the amount your insurance policies will pay out upon premature death.
If you own more than you need, then congratulations! If you have a shortfall, don’t worry. A financial Planner / Estate Planner can advise you on your options available.
How Do You Ensure Your Legacy Go to Your Desired Beneficiaries?
Writing a will is the most common way to do so. Whether you need to hire a lawyer to draft your will, depends on how complex it is, and whether you want to leave your assets to someone other than your spouse or relatives. If your will involves overseas investments, it’s recommended you engage a lawyer to help you draft a legalese. Do up a will and appoint a reliable executor for your estate execution and distribution. Don’t just rely on the government intestate law for your love ones.
For insurance policies, you may want to consider nominating of the beneficiaries with the respective insurers.
Estate Planning can be overwhelming for a layman. It is advisable that you discuss your legacy plans for your loved ones with a qualified Financial Planner / Estate Planner and allow him / her to walk you through the process.
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