Here is your ultimate guide to estate management and a list of things you should do to get started.
As a savvy real estate investor, you know that you don't have to be ultra-wealthy to need estate planning. Your estate includes everything you all own. Protecting your assets for future generations makes estate planning worthwhile.
Keep reading to learn how to protect your assets!
Estate management, also called estate planning, is the action of picking who receives your estate and manages your responsibilities if you are dead or incapacitated. The process ensures your beneficiaries enjoy your estate with less tax burden.
Estate planning establishes a procedure that can align with your personal and financial goals. How do you want your assets divided if you die or are incapacitated?
If you want to learn more about estate planning benefits, check out our guide, Estate Planning for Real Estate Investors.
Here are three estate management tips to protect your financial future.
Tangible assets include:
Intangible assets include:
Once you know how large your estate is, you need to estimate its worth. You have options for assessing the price of your assets:
Either way, you choose to estimate the value of your assets, you will ensure that your heirs inherit your possessions equitably.
Once you know what's in your estate and how much it's worth, you need to think about how to protect your family and assets once you're not in the picture.
As a real estate investor, you have more things to consider, and your estate management plan needs to include legal directives. A wise option for carrying out your directions is establishing a living trust.
A living trust might be right for you. A living trust allows you to designate which portion of your estate goes where. If you're incapacitated, your trustee takes over. But, how do you find a trustee for your living trust?
Finding a trustee can be tricky. At a minimum, you want your trustee to be someone who:
Read our article Finding A Trustee For Your Estate Plan to learn more about selecting the right trustee for you.
If you die, your trust assets transfer to your beneficiaries, and you get to skip the probate process.
Probate is a time-consuming and expensive court process that determines how to divvy up your estate. It's best to avoid court in these matters, so you might consider using a pour-over will in addition to a trust for the best protection.
A pour-over will is a standard will form stating that the assets not included in your trust should be moved into the trust and distributed via the living trust terms.
Read more about the benefits of establishing a living trust in our article Living Trust Versus A Will: What's The Benefits For Rei?
Whether you choose a will or trust to carry out your wishes, you will need to determine who receives your estate.
Follow these steps to ensure that your assets go to the right people:
Change is the only constant in life. As a result, your estate management plan needs to be flexible. To keep your assets protected, make sure to revisit your plan regularly and if you have a life circumstance change.
We went over the importance of inventorying your assets, estimating their value, establishing a legal plan, and determining your beneficiaries. If you follow our ultimate estate management guide, you will take a huge step toward protecting your assets.
To learn more, check out our Estate Planning hub. This page serves as a knowledge base on all things related to leaving your legacy.
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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