You’ve been working hard every single day to build a legacy. But how can you be sure that legacy will be protected and handled the way you want it to be handled when it’s time to pass it on?
The key is asset management. And that’s not just going to happen—it takes time and planning.
Time is Money
You should update your estate plans every three to five years. If you’re a really active investor working on a large scale, you should think about updating your plans more often than that.
As a pancreatic cancer survivor, I can tell you there’s never a convenient time to have this conversation, but there’s always a right time: right now. You want to be prepared when bad things happen and be able to save yourself the added stress of having these conversations in the middle of a difficult time.
And if you do plan ahead and get your estate plans in place, those documents will help you pass on more of what you make.
Most estate plans are made up of four components:
- Living will
- Power of attorney
The ins and outs of these components are going to vary based on your situation and where you live. Talk to an attorney to get specific advice about each of these documents.
There are some general truths about these documents, though. First, the trust is the most important because it’s going to help you avoid probate and build a short-term and long-term legacy for your family. Trusts can be customized in any way you want. They’re essentially contracts between you and your future heirs.
Trustees, who handle the trust, can be family members or attorneys depending on your situation. The trustees are responsible for making sure that contract you’ve set up is carried out and your heirs receive what you’ve designated.
The power of attorney form is going to be important if something happens to you and you need healthcare. How do you want to be cared for in a hospital or hospice situation? What if you’re on life support? The goal here is to help your family avoid conflict and added stress.
You will work your entire life to help your family build relationships. You don’t want healthcare decisions or your financial legacy to cause family conflict. After all your hard work, you want your family to enjoy the benefits, not fight over them.
Take control of your legacy and follow through to be sure that the people you care about receive what you want them to receive without any unnecessary hassle.
Get a Land Trust
Land trusts are a phenomenal way to separate larger properties and limit your liability. If you put a property in a land trust, you mitigate your risk.
When you set up a land trust, you deed a property or several properties into that trust and nominate a trustee. Then the beneficiary of the trust receives the benefit of the assets in that trust.
I’ve used land trusts for short sales. The owner would deed the property into a land trust and make my company the beneficiary. After we flipped the property, we were able to benefit from the short sale.
If you have questions, don’t guess or assume. Talk to someone who’s got some answers and make something you want to be long-term really last.