LEGAL

Everything You Need to Know About Planning Your Estate

COVID-19 has increased the demand for estate planning. In fact, 63% of younger adults are more likely to have a will this year than they were pre-pandemic. The pandemic has forced Americans to get their affairs in order before it’s too late.

Unfortunately, about two in three Americans still don’t have crucial estate planning documents. 

Are you ready to start planning your estate? Here’s everything you need to know to get started. With this estate planning guide, you can remain efficient and ensure you have everything you need.

You never know when an accident might happen. Having your affairs in order for your loved one will give you peace of mind. 

Get started with this estate planning guide today.

What is Estate Planning?

It helps to cover the basics first. What is estate planning, exactly? 

Planning your estate gives you the chance to determine who will receive your assets after your death or incapacitation. The individual you designate can also handle your responsibilities when you’re no longer able.

The goal of having an estate plan is to ensure beneficiaries receive assets while minimizing:

  • Gift tax
  • Estate tax
  • Income tax
  • Other taxes

It can also help specify your wishes so there’s no confusion after your death. 

You can fine-tune and adjust your estate plan as you experience personal or finance changes. 

Estate planning involves more than your last will and testament, though. It also ensures your assets are transferred as smoothly as possible to the right entities. 

Your estate plan can also outline how you want your health care handled when you’re no longer able to care for yourself. For example, it can also cover long-term care, who will manage your finances, and who will look after your children.

If you fall into a coma or develop Alzheimer’s, your family can refer to your estate plan to find your directive. 

An estate is a collection of everything you own, including your:

  • Cash
  • Business interests
  • Real estate
  • Investments
  • Personal property

When you pass away, those assets need to go somewhere. Having an estate plan drafted will ensure there’s no confusion about your wishes. 

Who Needs an Estate Plan?

In short, everyone should have an estate plan. Many people believe they can only benefit from estate planning if they’re rich. That’s not the case.

Your estate covers everything you own, regardless of the size or worth. 

Planning your estate now could benefit your loved ones in the future.

The Process of Estate Planning

After reading this estate planning guide, consider hiring a lawyer. An experienced estate planning lawyer can help you navigate this process. They’ll ensure you don’t miss any steps or documents along the way.

Otherwise, here are the fundamental steps you’ll need to consider while planning your estate. 

1. Inventory Your Possessions

First, take a moment to inventory your assets. You might think you don’t have enough belongings to justify estate planning. Once you take inventory of everything, however, you might find that’s not the case.

Your assets are both tangible and intangible. They can include:

  • Home, land, or other real estate
  • Collections (antiques, trading cards, coins, etc.)
  • Vehicles (boats, motorcycles, cars, etc.)
  • Other personal possessions
  • Checking and savings accounts
  • Certificates of deposit
  • Mutual funds, bonds, stocks
  • Life insurance policies
  • Retirement plans like a 401(k)
  • Health savings accounts
  • Ownership of a business

You’ll need to estimate each assets’ value while taking inventory of your possessions. You might want to consider outside valuations, too. 

2. Consider Your Family’s Needs

In order to develop a thorough estate plan, it helps to consider your family’s distinct needs. Consider how to protect your assets and your family when you’re no longer able.

If you have minor kids, you might want to start by documenting your wishes for their care, including guardianship. Don’t assume family members will step in or know what you would have wanted. Instead, outline your goals.

When you write your will, you can name a guardian for your children.

Ensure you have enough life insurance during this state, too. 

3. Outline Directives

Your complete estate plan will include important legal directives. Hiring a lawyer can help you navigate these processes.

For example, you might need a trust.

A revocable living trust designated portions of your estate to specific parties. If you become incapacitated, a trustee will take over. When you pass on, the assets will transfer to beneficiaries you’ve designated.

A medical care directive, or living will, outlines your wishes if you’re unable to make your own health care decisions. You can also give an individual power of attorney to make these decisions when you’re unable. 

You might consider giving someone limited power of attorney. You can put limits on the powers of your named representative.

4. Select Beneficiaries

Take the time to determine your beneficiaries, too.

First, check your insurance and retirement accounts to determine if a beneficiary is already listed. Make sure the right individuals receive your assets.

5. Note State Tax Laws

Remember, estate planning can help minimize estate and inheritance taxes. Make sure to consider hiring an attorney. They can help you navigate this terrain. 

6. Consider a Lawyer

About six in 10 adults don’t have a will or a living trust. Hiring a lawyer will ensure you gather the documents you need. They can help draft your will and trust when you’re ready.

You can reach out to this practice to get started.

Remember, you might need to make changes to your estate plan as time goes on. Prepare yourself to revisit your estate plan in the future.

For example, you might consider revisiting your plan if you get married or divorced. You might need to make changes if you have a child or lose a loved one, too. 

Talk to your lawyer about any laws that have changed as well. 

Planning Your Estate: Everything You Need to Get Your Life in Order

Planning your estate is essential for your peace of mind and your family. Don’t wait to start this process. Instead, consider hiring a lawyer who can help.

With their experience, you can draft your estate plan and make changes as needed. 

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