An Estate Planning Guide for Senior Citizens: Check Benefits and Steps Involved

The time of birth and death of any living creature in this world is beyond the sway of humans. Uncertainties are exclusively aligned with all living beings on this planet and despite this, humans on the other hand are fortunate to have the opportunities to ensure they plan their wealth distribution as per their expectations. Estate Planning is a means to clinch the assets and properties held by someone to be distributed as per their planning and allotment among the loved ones after their demise.

The process of estate planning includes not just assets and profits, but also the transfer of liabilities, debts and loan borrowings to the legal heir after necessary arrangements are made as per the individual's intention. A trusted executioner would be needed to implement the plans made, which the estate planner can appoint as per their choosing, and mention each detail in the legal documents. It is advised by experienced wealth planners to ensure the documents mentioning the asset transfer must contain simple language with minimum legal jargon, to be understood and agreed by the legal heir(s) without causing any disputes. Also, a Power of Attorney (POA) appointment is requisite for someone who cannot perform the transactions related to property, investments, fixed deposits, and properties by themselves due to old age or illness.

Benefits of Estate Planning

Lower Expenses

When someone passes away without allocating the property or assets among the loved ones, there are higher chances of disagreements between them, for which legal actions might follow or the court may intervene as per its authority for disbursement of the assets or custody of minors. The expense would pile up if the family members or the loved ones turned against each other. One of the most important features of estate planning is that it would undoubtedly reduce the overall expenses incurred by loved ones to settle or distribute the property and assets among themselves.

Preparation for Uncertainties

As mentioned earlier, accidents and medical emergencies don't wave a flag before arrival. The estate planner must prepare their will or mention the distribution of their wealth as soon as they can. A small mistake during a car ride can escalate to severe conditions or a sudden stroke in mid-life could result in a financial crunch for the dependent family. Having a will prepared before such uncertain scenarios can ensure things are smoothly functioning without unnecessary stress during times of such difficulties.

Smooth Retirement

Some individuals have diversified income portfolios including businesses, deposits, interest receivables and rents from various properties. Having a will prepared by an expert in estate planning helps the individual to ensure they allocate appropriate earnings to their loved ones as per their convenience. They can then reap the benefits of their retirement by relying on the government which offers immediate benefits such as pensions and healthcare. This would save the medical and related expenses incurred by the individual before their death.

Steps Involved in Estate Planning

Asset identification

The first step involved in estate planning is to make a list of all the tangible and intangible assets under the ownership of the individual. The senior citizen needs to consider how their assets and properties are to be distributed among their family members. As per the value and earnings from the asset, the senior citizen can allocate appropriate holdings or ownership to particular family members or mention equal distribution after their death.

Creation of Trust

The most important step while planning the disbursement of the estate to the family is to create either a family trust or a normal trust and attach all the assets to it. Once all the important income-generating assets and properties are under the trust, the next step is to nominate the beneficiaries of the trust. Each beneficiary can either have an equal share or a varied sharing structure as per the senior citizen mentioned in the registration of the trust. This would ensure earnings and wealth distributions take place regardless of whether the individual is alive or dead.

Will Creation With An Executor

A will is the legal declaration of the wealth distribution of the individual to his or her heir(s). The senior citizen must declare all the properties, assets, deposits, insurance benefits and rent earnings if any in the will with all the required details with the stamp or the signature. To ensure the proceedings happen according to will, the individual needs to appoint an executor who can be either a beneficiary or a third party. The appointment of such authority would keep the beneficiaries away from climbing the steps of the court for settlements.

Lastly, the senior citizen planning the estate distribution must review all the investments, policies, documents, asset ownership and debts if any before handling the executor the will. The nominees mentioned and their share from the total assets and properties must be carefully understood and signed, without the signature of the primary individual initiating the will, the document would be considered void in the eyes of the law and all the belongings of that individual might end up to be confiscated by the legal system.