Estate plans are an essential tool for those in the Pittsburgh area who want to protect their legacies. If you feel like you cannot benefit from estate planning when you have debt, you have been sadly misinformed. You do not need to have a considerable amount of wealth or debt to use estate plans. Depending on how you structure them, they could be the solution you desire.
When you die, your personal assets and debts trickle down to your estate. Before your loved ones can receive their inheritances, your estate must settle any outstanding financial obligations. The following information offers insight on how to lessen the impact of debt on your legacy:
Explain your finances to your loved ones
No one wants to admit they are in debt, and many people do not realize how ordinary it is to have debt. If you do not give your heirs a clear picture of your outstanding financial obligations before you die, they could be in for a rude awakening. Disclose all financial liabilities and assets and account information to trusted individuals so they know what to expect.
Start making payments
Start making payments on your debts. Even if you do not think you can pay them off, every penny counts. Paying down your debts while you are living enables you to reduce the amount of debt your heirs might have to deal with when settling your estate.
Consider life insurance
Life insurance can help you to provide for your loved ones after you die. Research different policies to ensure you select the right coverage. You cannot use the proceeds while you are alive, but your policy beneficiaries can use them to settle any debts you leave behind so your estate does not have to.
Estate planning offers many strategic ways for individuals like yourself to protect your legacy and secure a seamless transfer to your heirs. Many of them find it beneficial to work with legal counsel and to include trusts in their estate plans.