Proper estate planning can ease the burden left on your family after you die, reduce or eliminate probate, and ensure your loved ones and beneficiaries are taken care of. Estate plans help you prepare ahead of time for your death or incapacitation and make sure all your assets are distributed to your named beneficiaries, that your minor children are looked after according to your wishes, and that your end-of-life requests are respected.
Many people falsely believe that you have to have a large estate to necessitate an estate plan. The reality is that most people will benefit from a well thought out estate plan, even if they don’t have a lot of assets. If you have a very simple estate and own little to no real property or assets, you can probably suffice with a simple will. But for everyone else, the time and money you put into your plan now will give you peace of mind for years to come.
Peace of mind: Even if you won’t be leaving behind a lot of money, you’ll know that your assets are allocated just the way you wanted.
Appoint a guardian: If you’re the parent of minor children, you’ll get to decide who becomes their guardian instead of the courts, and can plan ahead to ensure they will raise your child the way you want them to.
Protect special needs family members: You can also name a guardian of a dependent adult child. This will take extra care and preparation to find the right person, but your choice will ensure lasting care for your loved one.
Privacy: Without an estate plan (and ideally a living trust as well), your assets will go into probate upon your death and all of your estate information becomes publicly available. A well-written out estate plan can mostly avoid this.
Reduce or avoid taxes: Some of your assets may be subject to federal or state estate tax, inheritance tax, or gift tax. Not all of these are avoidable, but if you set up a living trust as part of your estate plan you can reduce their effect.
Reduce family strife: If you have a clear and legally-bound plan in place when you die, it will reduce the amount of family in-fighting that can occur after your death.
Avoid Probate: When a person dies, their assets go into probate where a court decides upon your beneficiaries. Estate plans can dramatically reduce the time and cost of this process.
When you first start planning your estate, there’s a lot of prepwork you’ll need to do upfront. Estate planning is possible to do on your own with the help of a guided online program, but it is highly advisable to work with a qualified estate attorney.
Here is link to a good site that can get you started before your first meeting: https://eforms.com/estate-planning/
As you start thinking about your plan and compiling information, there are a number of estate planning forms you may need to fill out. Not all of these will apply to everyone, but you should at least be familiar with them:
A will, simply states what will happen to your assets after you die and who will be named the guardian of any minor children. If you only have a will, all your assets will still have to go through probate.
If you wish to avoid probate, you should set up a revocable living trust. A revocable living trust will put your assets like property or business holding into a trust where you become the grantor and you name someone else or an attorney to become the trustee. The trustee will officially hold the deed to your assets, but you will keep earning off them and managing them until you die. Your death will then initiate the trustee to disperse the assets following the directive of your trust.
Power of Attorney (POA) allows someone else to make financial (and sometimes medical) decisions for you. A durable POA is initiated when you die or become incapacitated and allows your attorney-in-fact to carry out your wishes for your assets. A general POA becomes void when you die or become incapacitated and is therefore useless for estate planning.
There are many types of beneficiary designations and all should be consistent and revised periodically. In addition to naming beneficiaries in your estate plan, you should also name them on any brokerage, investment, or insurance accounts.
This is sometimes referred to as a living will, and spells out your wishes for your medical care should you become incapable of making decisions for yourself.
You’ll need to organize all your important financial and medical paperwork so that your family or executer can find everything easily. This list will change depending on your circumstances, but the most common documents are:
Estate planning may seem like a big step, but it’s one that you need to take while you are still able to protect the needs of your family and loved ones. Don’t wait until it’s too late.