Estate and You: Things to Remember When Estate Planning for an Upcoming Passing
Do you have an estate plan that is all set up? Maybe you think that estate planning only applies to rich individuals with thousands to millions of dollars in assets and who live glamorously. Time to ditch that idea. Realistically speaking, nearly everyone has an estate.
An individual’s estate comprises everything they own, including their home, car, other real estate, savings and checking accounts, life insurance, investments, furniture, and personal possessions. No matter how big or small, you cannot take your estate with you once you die, so it’s important to have an estate plan for your belongings and such.
When you pass, you want to be in control of how your properties and estate are distributed to your family or organizations you care about the most. You want all your last wishes to be carried out, and to be assured that everyone you care for will have something to receive. All that is possible, though you want it done with the smallest possible amount of legal fees, taxes, and court costs. That is where estate planning comes into play.
Understanding Estate Planning
Estate planning is the process of collecting, preparing, and managing an individual’s asset base upon the event of their inevitable passing. This process includes bequesting of properties and assets to heirs and settling estate taxes. Most estate plans are established under the guidance of experienced estate law attorneys like those at Whitcomb, Selinsky, PC.
Take note that estate plans involve a long procedure that includes:
- Formulating a will
- Limiting estate taxes by means of establishing trust accounts under the name of your beneficiaries
- Creating or updating beneficiaries on plans including IRAs, 401(k)s, and life insurance
- Establishing a guardian for living dependents
- Setting up burial and funeral arrangements
- Instituting gifting in annual terms to minimize the taxable estate
- Creation and recording of a TOD deed if you wish to continue to hold all ownership rights and only transfer property ownership upon death.
Things You Should Know About Estate Planning for an Upcoming Passing
Formulating an estate plan in advance and naming your beneficiaries is a more comprehensive process than you would think. Good estate planning includes:
- Instructions for passing on your values (education, religion, hard work, etc.) apart from your valuables.
- Instructions regarding your care if you become too disabled for your passing.
- Providing family and beneficiaries with special needs consideration without distorting government benefits.
- Naming an inheritance foreman and guardian for minor children.
- Providing money for loved ones who may handle money irresponsibly, and providing for beneficiaries who may need future potential protection from divorce or creditors.
- Life insurance for your family upon your passing, disability income that replaces your income when you are no longer able to work due to injury or illness, and long-term care insurance to compensate for your care in the event of an extended illness.
- Providing transfer of your assets or business upon your disability, retirement, or death.
- Minimizing court costs, taxes, and unnecessary legal fees.
Remember that estate planning is an ongoing process and not a one-time event. Make sure to review your plan and update your family. Your financial situation may change over the course of your life.
What Happens If You Do Not Have an Estate Plan?
Most individuals turn a blind eye to estate planning because they think they are not old enough, do not own enough, or are simply too busy to worry about it. They assume they have so much time left, or they are confused and do not know who can guide them, or they are just too scared to think of anything related to death. If you do not have an estate plan, your family will have to pick up the pieces.
- Your state has a plan for you, but you may not like it: If the title of your assets bears your name and you are unable to do business because of a mental or physical incapacity, then only a court appointee can make the decisions for you. Not your family, but the court will have control over your assets and how they will be used.
- Your assets will be allocated according to probate laws in your state: In most states, if you are legally married and have kids, then each of them will receive a share of your assets. Thus, your spouse may receive only a fraction of your assets and estate. Sometimes, it may not be sufficient to live further.
- The court will take control of your minor child’s inheritance: The court shall manage inheritance of a minor child upon a parent’s passing without an estate plan. Likewise, the court will designate a guardian and you have no idea who may be chosen.
Given the circumstances above, wouldn’t you rather have those matters handled privately by you or your family? Do not let the court meddle with your assets. You have the potential to keep control of who receives your estate and when.
Now that your mind has fresh ideas about estate planning, it’s time to do the necessary process to plan for an upcoming passing. Remember that estate planning is a continuous progress, thus it must be initiated once you have a sufficient asset base and then revisited as needed
Life progresses, and so do your goals. The estate plan you set up should always align with your new goals. Without sufficient estate planning, your family may end up with excessive financial burdens. Thus, a will must be established even if a taxable estate isn’t big.
Planning your estate before an upcoming passing can be beneficial to your family’s future. Click here to make the most out of your legal options regarding estate planning.
[su_box title=”About the Author” box_color=”#abbeef”]
Kiren is an estate law writer who enjoys writing about subjects in relation to real estate and law. He has written for a few blogs in the past and enjoys sharing his knowledge with those who enjoy reading. In his spare time, he spends quality time with those he loves.[/su_box]
