Included in an estate is the right to ownership of real property. The type and quantity of interest that persons have real property is known as an estate in land. Although an estate in land offers the right to own the property, an interest simply grants a right to utilize the land. Estates in land are of two major classifications, the freehold estates and the non-freehold estates. Freehold estates involve ownership, whereas non-freehold estates involve tenants.
Importance of Estate Planning
Whatever type of estate you have, it is imperative to come up with an estate plan. For instance, many were shaken by the sudden demise of the musician Prince Rogers Nelson who perished in his home at 57 years old in 2016. As his best music hits were again played and many have flooded social media with tributes to the pop icon, the financial media started wondering and asking who would inherit his properties and other assets as Prince didn’t have a will.
Three years after his death, Prince’s massive estate, which is deemed to be worth millions of dollars, isn’t yet unsettled, isn’t formally appraised and isn’t yet distributed to his six siblings. This is one example of the importance of estate planning not only for musicians but for anyone.
One doesn’t actually have to be a vastly rich to make an estate plan. Creating one would make it easier for your family to know what to do with your properties and assets upon your demise. Below are some important documents to begin gathering for your family to know who inherits or what to do with your assets:
This documents specifies who obtains the assets from your life insurance policies, 401(k)s, IRAs, as well as other financial assets that you have. These would actually outdo any instructions stipulated in a last will and testament; hence it’s vital to update it regularly.
Payable On Death Forms and Transfer On Death Forms
A POD form usually specifies who should inherit the money from your checking and/or savings accounts in the event of your demise. A TOD form is comparable to a POD form however is usually utilized for brokerage accounts. Moreover, a TOD deed specifies who would gain the deed to your house following your death.
A living will puts into detail as to which treatments should be done by your doctors if you become incapable of communicating them to your doctors.
Last Will and Testament
Frequently mistaken as a living will, this document delineates how you would want all of your assets to be distributed and who becomes the legal guardian of your minor aged children. Note that making a last will and testament doesn’t prevent any court proceedings. It still has to undergo validation; however the will functions as a guide for the court to help fulfill your will.