Estate planning is not just for your parents or grandparents.
When should you start estate planning? Many people delay estate planning, thinking they have plenty of time or that it is not yet necessary. While we all hope that is the case, having an estate plan in place allows you to set up medical directives, define your legacy, and protect your loved ones from the probate process should the unexpected occur. If you have any assets or have specific wishes, it is a good idea to create an estate plan, even if it is just a simple will. Although legal documents require an estate planning lawyer, our team can guide you through the process and connect you with the right professionals.
We can provide estate planning guidance for the following:
Wills and other legal documents
Once you have created a will, you may also want to set up a trust depending on your situation. In addition, you may want to create healthcare directives and assign power of attorneys. Our team can go over your options to help you make informed decisions.
Gift strategies
When giving to charity or loved ones, there are various options to consider. You can create trusts, list people as beneficiaries on accounts, name individuals or charities in your will, etc. It is important to understand the pros and cons of each option, including their tax implications, to decide what is best for you.
Tax strategies
As mentioned above, estates are subject to various taxes. Working with your financial advisor and tax advisor in advance will allow you to understand these taxes and how to minimize them.
Additional considerations
Depending on your situation, it may also be worth considering additional topics such as planning for a surviving spouse, prenuptial agreements, and business succession planning. Your advisor can help you navigate the ins and outs of your financial situation and additional estate planning options you may need to consider.
Planning for the unexpected.
Estate planning not only dictates how your estate should be divided should you pass. It often also includes authorizations and designations should you become incapacitated and require someone else to step in and manage your financial situation.
Common Questions Related to Estate Planning
What is the difference between a will and a trust?
A will is a legal document that explains how your assets should be distributed to beneficiaries after your death. However, a will usually does not protect all your assets from the probate process, which can vary by state.
A trust is a legal arrangement to manage your assets during your lifetime and after your death. You must transfer assets into the trust to fund it. Both revocable and irrevocable trusts help keep your assets out of probate and off the public record.
While a comprehensive will with proper beneficiary and transfer-on-death (TOD) designations may be enough in some situations, a trust can be more effective in others. Trusts are generally better at avoiding probate and are useful for complex situations where you want more control over how your funds are distributed. Most individuals who have set up trusts also have wills.
What is probate and how can I avoid it?
Probate is the legal process of distributing assets after someone passes. This process can be costly and time-consuming, delaying your loved ones’ access to funds necessary for funeral or estate expenses.
A few common practices to minimize the chances of your assets going through the probate process include:
- Setting up a living trust
- Adding joint account owners or title assets jointly
- Naming beneficiaries directly on accounts
Aside from a will or trust, what other estate planning documents are important to create?
A few of the other key estate planning documents to consider include:
- Living will (advanced healthcare directive): Specifies your wishes regarding medical treatment and life sustaining measures if you are placed on life support.
- Durable power of attorney: Grants someone you trust the ability to manage your financial and legal affairs if you became incapacitated.
- Healthcare power of attorney: Allows someone to make medical decisions on your behalf if you are unable to do so.
- HIPAA authorization: Grants an individual access to your medical records and the ability to discuss your care with your medical providers.
- Beneficiary designations: It is highly recommended that you fill out beneficiary designations on every account you are able (retirement accounts, life insurance policies, etc.).
- Guardianship designations: If you have children, it’s essential to have a plan to ensure they are cared for according to your wishes in case something unexpected were to happen.
Estate planning - not just for your parents and grandparents
When you can still picture so much life ahead of you, it may not seem to be important to plan for a life you envision yourself being a part of. The reality is that time is not guaranteed and it is important to plan for the unexpected. One of the most thoughtful things that you can do for your family is ensure they are taken care of should you no longer be there to take care of them.
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