Ten Important Things to Know
About the Estate Planning Process
An Estate Plan is not only for the wealthy. Regardless of your assets, Estate Planning can provide certainty and protection for an individual’s family and loved ones.
A will or trust is not an Estate Plan; they are documents. An Estate Plan takes into account not only one’s assets but also their family structure and personal concerns for the future.
Proper Estate Planning can provide protection for a family’s assets from the possibility of divorce, and from creditors.
Involve family and benefactors in the Estate Planning process. This is one of the best ways to avoid bitter, expensive and time consuming disputes down the road. Remember, no matter how well a person’s parents, children and extended family get along now, the passing of a loved one plus money often equals trouble. Head off issues before they arise by addressing them early.
A will is necessary in most States to appoint a guardian of one’s children in the event both parents of a minor pass away. Although deciding who to appoint as guardian is one of the most difficult choices in Estate Planning, it’s always better to choose someone now, rather than waiting until you find the right fit later; in some instances later may be too late. Keep in mind that the guardian can always be changed in the future.
Your don’t have to be a Rockefeller for the Tax Man to come knocking. The federal government and almost all States impose an estate (or death) tax on individuals passing over a certain dollar amount (including the value of real estate, life insurance death benefits, retirement accounts, et al.) to anyone other than their spouse, upon death. In some States the dollar limit of the exemption can be as low as $675,000, and in the worst case scenario combined federal and State estate taxes can exceed 65%. Be sure to check the estate tax exemption in your State to avoid the surprise of a large, unexpected tax bill.
Prepare for disability. Most people do not realize that there are ways to protect their assets (and the assets they intend to leave to their loved ones) from the ever-rising costs of skilled medical and nursing home care. Through proper planning and the use of trusts, disabled family members can maintain assets for their care while not affecting existing or future government benefits.
Estate Planning is not a one-time deal; it is an ongoing process. As a person’s family, finances and life change over time, so must their Estate Plan. It is extremely important to revisit an estate plan every three to five years, or upon a major life event to properly account for personal changes as well as changes in the law.
The creation of an Estate Plan is often therapeutic, as it provides the opportunity to take stock of one’s family and finances, providing individuals the chance to see where they stand today and where they hope to be in the future.
Not all lawyers are created equally. Just as you would not go to a podiatrist to treat a heart problem, you would be wise to keep your Estate Planning needs away from a lawyer who focuses his/her practice in an area of law other than trusts and estates.
For any questions or a free Estate Planning consultation, please feel free to contact us anytime.