CommonCentsMom.com is advertiser-supported: we may earn compensation from the products and offers mentioned in this article. However, any expressed opinions are our own and aren't influenced by compensation. The contents of the CommonCentsMom.com website, such as text, graphics, images, and other material contained on this site (“Content”) are for informational purposes only. The Content is not intended to be a substitute for professional financial or legal advice. Always seek the advice of your Financial Advisor, CPA and Lawyer with any questions you may have regarding your situation. Never disregard professional advice or delay in seeking it because of something you have read on this website!
There are several types of estate plans, but the three most common are wills, trusts and powers of attorney. The CPA will be able to advise you on the best option for your situation.
Keeping Your Assets
Estate Planning: Wills: The purpose of a will is to determine who will inherit your assets after you die. You can leave everything to one person or have multiple beneficiaries that are named in the will.
If you have children that are minors or have special needs, they may also be listed as beneficiaries. This is called a “trust” and would go into effect after you die. A trust is another way to protect assets from creditors if needed. It can also provide an incentive for children and other beneficiaries to make wise decisions with their inheritance (no overspending!).
A power of attorney allows another person to make decisions for you in case you become incapacitated (unable to make your own decisions). This person can also be a family member or a trusted friend. If you have multiple assets, you may need to have multiple powers of attorney.
CPA Can Assist You, and Prepare the Documents
A CPA can assist you in determining the best estate plan for your situation. They will also help you determine if filing for bankruptcy is the best option for your financial situation. The CPA will also prepare all necessary documents, including the required legal documents and filing forms with the court.
This can save you time and money by avoiding mistakes and errors. Estate Planning: Trusts: Trusts are a popular way to protect assets from creditors when there is a risk of losing your home or other valuable assets to creditors or foreclosure.
You can create a trust to manage all of your assets and pass them on to beneficiaries at your death or when you become incapacitated (inability to make decisions). You would name a trustee (person in charge) and beneficiaries (people who will receive the trust assets).
A trust would go into effect after you die or become incapacitated. Trusts are most commonly used with homes, but they can be used with any asset, including vehicles, retirement accounts, etc.
Further Steps to Keep the Asset
Estate Planning: Powers of Attorney: Powers of attorney are legal documents that allow you to make decisions for yourself in case you become incapacitated. You can name a person to act on your behalf in making financial and medical decisions for you, including those related to your assets.
The person would be called an “attorney-in-fact” or “agent”. A power of attorney could be used with assets such as a bank account, stocks, bonds, retirement accounts, real estate and vehicles. A power of attorney can also be used with medical decisions regarding healthcare decisions. Estate Planning: Assets: The most common assets are homes and cars.
Many people also have stock portfolios and investments that can be protected with a trust or estate plan. A CPA will assist you in determining the best options for your situation. Benefits of Using a CPA: The main benefit of using a CPA is that they have experience in preparing all the necessary legal documents required by the court (for bankruptcy) and filing them with the court.
