When developing an estate plan, there is much to consider. For many, the estate planning process can feel like an overwhelming task. While estate planning may not be at the forefront of your mind, and because of the significant undertaking to create your estate plan, it can easily be set aside for another day. Unfortunately, because of this, many may face the unexpected or pass away without an estate plan in place. This can be an incredibly dangerous prospect, one that can leave your loved ones with no idea of how you would like your final wishes carried out. If you have yet to develop an estate plan, it’s important that you contact an estate planning lawyer as soon as possible. Here are some tips to consider when developing an estate plan:
Tip #1 Make a Plan for Your Children
If you have minor children, developing a plan for them is probably the most important aspect of estate planning. You will want to make sure that they are properly cared for in the event you are no longer able to do so yourself. This can occur by appointing a guardian to assume care of your children and developing a financial plan for how your children will be cared for and what assets they stand to inherit when they reach adulthood. An estate planning lawyer will provide you with key counsel in how to clearly outline this within your estate plan based on your specific needs.
Tip #2 Take Stock of Your Assets and Liabilities
Gather information regarding your assets and liabilities. This is key for an estate planning lawyer during the planning phase. Assets to consider may include pension plans, retirement accounts, life insurance policies, property, and other valuables. Your lawyer will be able to work with you to determine your net worth, and how your assets should be managed within the estate plan to mitigate tax obligations and avoid probate.
Tip #3 Consider Who Your Beneficiaries Will Be
Once you have taken stock of your assets, you will need to determine who stands to inherit them and how. You will want to be sure that beneficiaries are named on all of your accounts that allow for you to do so. This is key to making sure that assets are passed on to the appropriate parties. In the event that you have children, you may even consider developing a trust to allow you to decipher when and how the assets should be accessed.
Tip #4 Identify an Estate Executor
You will need to identify someone who will oversee the estate once you pass away. When considering this, you will have a variety of options. While many choose to appoint a trusted family member or friend as the executor, it’s important that you talk with the person first to ensure that they are up for taking on this huge responsibility. Another option may be to appoint a lawyer to manage your estate for you.
Tip #5 Consider a Trust
A trust has the ability to help carry out your wishes and distribute your wealth. Trusts can offer a number of benefits such as:
Reducing estate taxes
Ensuring that assets are appropriately distributed
Protect young beneficiaries who stand to inherit assets at a young age
Allows you to put stipulations on inheritance
Assign money for specific reasons such as college tuition, etc
Avoid the public process of probate
Tip #6 Make Sure You Update Your Estate Plan
Once you have created an estate plan, it’s important that you update it at least every 3-5 years, or when significant life changes occur. This may include factors such as the birth of children, marriage/divorce, changes to your assets, moving out of state, and more. An out of date estate plan may not be relevant when the time comes which may result in complications down the road.
With so many factors to consider, the process of developing a well-executed estate plan can be complicated. However, estate planning doesn’t have to be as cumbersome as it’s made out to be. Working with an experienced estate planning lawyer can help mitigate complications and ensure that your estate plan is well thought out and clearly structured in the way you would like.
Contact an estate planning lawyer for more information.