When it comes to estate planning "annuities" are not necessarily needed. However, it is good to have one in place because it offers many benefits.This is attributed to what an annuity is and the function it serves. An estate can be successful with or without one. When considering one, it is best to enlist the assistance of someone who is experienced in this field.

What is an annuity?

An annuity is defined as a contract for one individual or company to pay another a constant flow of payments. In most cases, the word "annuity" pertains to an agreement between you and a life insurance conglomerate.

The benefits of an annuity

An annuity offers protection from creditors, deferred excise on asset revenue, an assortment of investment choices, excise-free transfers among investment choices, lifetime revenue, and proceeds to heirs.

Estate planning needs certain elements.

What is mandatory for estate planning is a will, a living will , a trust and appointment of power of attorney.

Where do you start?

A great place to commence this process is by taking account of your current investments.

Your investments include, insurance policies, real estate or company interest and retirement savings.

A will is needed.

Wills are very important in estate planning. A will conveys to the world precisely where you desire your assets given out when you die. It's also the best place to appoint guardians for your children. Dying intestate can be expensive to your heirs and leaves no last word over who receives your investments. You will need a will to manage any holdings outside of the trust when you die.

A trust is necessary in estate planning.

Trusts are lawful instruments that allow you to place limits on how and when your investments will be dispersed upon your demise. They also permit you to lower your estate and gift excises and give out assets to your heirs without the expense, deferment and publicity of probate court, which offers wills.

The most difficult part of estate planning is talking about it with your heirs.

However, it is vital to do so to reduce misunderstandings and disagreements. The sooner you get it out in the open, the better it will for everyone in the future. This will lower the chances of conflict.

Annuities are not the main feature of estate planning. An estate has its needs and an annuity is basically an attractive option. It is best to have a combination of all elements so that all your bases are covered.

Learn more about this author, Angela Diggs.
Click here to send this author comments or questions.

---

Add your voice

Know something about Annuities: Are they vital to estate planning??
We want to hear your view. Write now!