Let’s do something folks don’t do much: Let's talk about the fun side of estate planning.
While it’s hardly a rip-roaring cocktail party subject, it’s important nonetheless. An improperly planned estate, or worse, no plan at all, complicates your already painful death for those who care about you. Here are some of our favorite benefits of estate planning, spelled out in a bit more detail.
As a real estate investor, you know the importance of planning ahead for your business. If supporting your family or other loved ones is one of your investing career goals, as it is for many of us, then the kindest thing you can do for those heirs is get familiar with estate planning for real estate investors.
Depending on what type of REI business you have, it’s fairly easy to make sure it outlives you. Some structures, like the Series LLC with its potentially unlimited lifespan, make this task easier.
Even though we love to talk shop about our riches and portfolios, ultimately, most of us don’t want to be remembered for our money alone. Leaving your heirs a business with a clear secession plan can save them the stress of also attempting to define and preserve your legacy.
YOU are the best authority on you and how you’d like to be remembered. The worst thing you can do is not have an estate plan at all. Heck, even if you don’t have family, friends, or even pets to provide for, you can simply give everything you own to charities close to your heart. If you want to establish a philanthropic legacy as well, many of the legal tools that asset protection experts like the Royal Legal Solutions team already use can help you make such donations.
Frankly, if you’re successful enough to have this problem, well, nobody’s going to feel sorry for you. You’ve got RLS’s sympathies, though. But that’s because we know who gets your money if you don’t decide first: that honor goes to Uncle Sam and a small army of attorneys and accountants. Everyone’s favorite people!
Giving away all your assets to the IRS isn’t most people’s idea of a storybook ending. Again, even if you can’t think of who your heirs would be, you can still probably think of a few people you don’t mind whose lives may be dramatically improved by your generous forethought and support.
A free property for a homeless man or sending your friend’s kid to college, really you can find something somewhere. The beauty of building your own legacy is you truly get to call the shots. Estate planning can ensure you’re remembered through your support of both people and causes dear to you for years beyond your passing.
The go-to model that works for most investors with assets valued under $10 million is a combination of the pour-over will and living trust. With these tools working together, you need not worry about all of those “Last Will”-only issues. You simply deed all of your assets to the living trust, which is a type of trust formed by an attorney that allows you to seamlessly hand off assets to your selected heirs. There’s no need for the agony of probate court. Click here to learn about the living trust.
As for the pour-over will, it’s a better choice as well than a “Last Will and Testament” alone. But a will alone is not a full estate plan. The pour-over will is superior, but needs the living trust to work properly. The pour-over will simply ensures any assets you have will go to the trust upon your passing. This can help avoid some of the sadder situations involving confusion regarding heirs and other unique estate planning situations.
The good news is that setting up this type of plan is simple with proper professional help. Our needs during the end of life can be highly individualized. Working with a qualified estate planning attorney can help you determine what you need most.
Scott Royal Smith is an asset protection attorney and long-time real estate investor. He's on a mission to help fellow investors free their time, protect their assets, and create lasting wealth.
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