When To Start Planning Your Estate
Have you gotten your affairs in order in case you pass away? Start making decisions now to make estate planning easier.
There are many things you may enjoy planning. For example, you may revel in preparing your meal plans for the week. Planning a family trip may also seem more like fun than a chore, depending on your personality. However, there is one chore almost nobody enjoys. That chore is estate planning. Yet, it is one of the most essential things to do in your lifetime. Estate planning is important because it ensures the longevity and proper care of your assets. It can also help you make sure your loved ones are cared for financially in your absence.
Estate planning is a process that often takes quite a while. However, you can make it faster and easier by making sure you are prepared. You must know the criteria necessary to determine how your assets are divided. Other decisions may also come with estate planning, such as creating what is known as a living will and choosing who can represent you if you are alive but unable to speak for yourself. Here are some top questions and answers relating to the estate planning process.
What is Estate Planning?
Estate planning is a process that delves into several aspects of your lifestyle. It allows you to put decisions in writing regarding your wishes. That record is kept until you are incapacitated or deceased. Then those you have named as power of attorney, health care proxy, or executor can refer to the record to make decisions on your behalf. Estate planning is also a form of asset management. It allows you to create a will and choose how those assets are distributed after your death. For example, you may opt to leave assets to family members, charitable organizations, or friends. Types of assets covered in a will during estate planning may include:
Any Vacation Homes You Have
Personal Possessions (Books, Artwork, Clothing Etc.)
What Other Types of Issues Are Dealt with During Estate Planning?
Estate planning includes more than the division of your personal property or finances. For example, your estate planning must include provisions for care of your minor children, if applicable. You can name caregivers for them in your will. Estate planning also includes recording your medical preferences in case of illnesses or accidents.
When you pass away, your assets must change hands. In many cases, that requires the payment of an estate tax, which is withdrawn from the funds available as part of the estate. Estate tax laws vary by state. Some states do not require such payments. However, in certain states beneficiaries of inheritances must pay taxes on the funds they receive. During the estate planning process, you must factor in such laws into the decisions you make regarding how your financial assets are divided.
When Do You Need to Plan Your Estate?
There is no specific age at which you must plan your estate. However, it is best to do so as soon as you reach adulthood, or at least as soon as you have assets to divide. There are also certain lifestyle choices and life events that make estate planning vital. For example, if you frequently fly or travel you may wish to protect your assets. A serious illness diagnosis could also push you to plan your estate suddenly. Other situations that require initial estate planning or adjusting an existing estate plan include:
Having Children, Grandchildren Etc.
Opening Bank Accounts
Receiving an Inheritance
Purchasing a Home or Property
Once you have an estate plan, do not let it languish. Most experts recommend updating it at least once every five years. It is also recommended to update it as soon as circumstances relating to it change. For example, if one of your listed beneficiaries passes away, you may need to redistribute assets to surviving beneficiaries. Similarly, if your power of attorney or health care proxy passes away, you must designate a new one.
What is the Procedure for Estate Planning?
To begin estate planning, the first step is to determine what your assets are. Those include financial assets like bank accounts. They also include homes, vehicles, and other tangible physical property. Then you must determine your fiduciaries. Fiduciaries are your representatives who must perform tasks relating to your estate. They can consist of family members, friends, lawyers, or other representatives. Each fiduciary must agree to his or her appointment and know how to access your estate plan documents when necessary. Common fiduciaries include your:
Power of Attorney
Health Care Proxy
The next step of estate planning is to make sure all your wishes are clearly documented. That includes any special requirements you have regarding upkeep or transfer of your home. It also includes care provisions for children or pets. Although allowed in some states, it is recommended you do your estate planning alone. It is much better, and often required, to utilize the services of an attorney or law firm specializing in estate planning.
What Are Some Top Estate Planning Law Firms in the United States?
You can hire a lawyer or law firm to assist with your estate planning. When doing so, you must weigh your needs against your budget and the experience level of the lawyer or firm. Small offices in your local area may not charge as much as nationally-recognized firms, but they also may not provide the same levels of service. Certain firms also specialize in dealing with certain estate types or issues, such as trusts or large estates with many beneficiaries. Here are some of the top law firms in the United States for estate planning:
What Should You Do Before an Estate Planning Meeting?
Many estate lawyers charge by the hour. Therefore, it is in your best interest to prepare before meeting with your estate lawyer. Create a clear list of questions you wish to ask. Also, make sure you have clearly defined your assets and preferred beneficiaries as much as possible. Speak to your loved ones ahead to make sure any plans you intend to make during your meeting are acceptable to all parties involved. Then you can discuss the best options for your estate as efficiently as possible.