Making an estate plan can give peace of mind to yourself, a surviving spouse, and your family members.
Despite its importance, estate planning is often considered a low priority by many people, even as they age. It can also be hard for people to think about their own eventual death or incapacity.
The section below provides helpful links to relevant topics:
Creating a proper estate plan can make the difference between having:
People who plan their estate have the advantage of avoiding probate costs, supporting minor children, and making changes to their plan during their lifetime.
The most common legal documents people use to transfer money or property are:
All these legal documents together are also called "an estate plan." As you begin planning, it's important to be informed about the various forms of estate plans, so that you can decide which is the most suitable.
For example, one plan might be more advantageous than another when it comes to estate taxes.
As part of your estate plan, you can also create documents that give someone else the power to make financial decisions. A financial power of attorney is helpful if you ever face incapacity or accidental death.
Estate planning can also include choices about your end-of-life care and medical care through:
These documents can give a loved one or another person the right to make medical decisions on your behalf. They can legally act as your health care proxy.
You can have an estate plan without having life insurance. However, life insurance will provide benefits to your beneficiaries when you pass away. It can be a useful tool within your estate plan, and transferring it correctly can lower estate taxes.
Retirement plans can also be part of your overall estate plan. Your estate plan documents will create a plan to transfer your money and assets after death. Often this includes retirement accounts you created earlier during your life.
The federal government and each state have estate laws. These laws cover issues such as:
If you're considering an estate plan, make sure you fully understand the laws that apply. An attorney or at-home DIY guided process can help you make an informed decision about the plan that best suits your needs and wishes.
In extreme cases, a failure to plan your estate can lead to ugly disputes and costly lawsuits between family members.
If a court is asked to distribute assets, it may do so in a way that doesn't reflect the decedent's wishes.
Also, it can take a year or more for a court-appointed executor to locate and manage estate property. Another consequence of lacking an estate plan is the payment of unnecessary taxes and other costs.
You have options for estate planning strategies. You can:
If you have a complex estate or family dynamic, you may want to contact an estate planning attorney first. State laws vary considerably and communicating this essential information without vagueness can be difficult. An attorney can make sure you still comply with local rules.
A guided online process can take complex ideas and help simplify them for you. It can also help you get paperwork organized and start the framework of your plan. The better you understand the requirements, the easier and more effective your time with an attorney will be.
Organization and preparation are always helpful in estate planning. The time spent preparing yourself and your paperwork can often translate into a cheaper and more thorough analysis of your needs.
You may want to review an intake questionnaire to know what types of questions to think about. Choices about your health, property, and family connections may need weeks of thought before you know your wishes.
The articles linked in this article can educate you on the types of big decisions you will need to make.
Though the decisions can be hard to think about, an estate plan will ensure that your wishes are communicated clearly and with the maximum weight of the law. It will also anticipate and avoid negative tax implications.
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