7 Estate Planning Tips Everyone Should Know

estate planning tips

Let’s be honest; no one likes to think about dying. Yet to every human, death is inevitable. But wait, have you thought about what happens to your wealth when you are no longer there or incapacitated?

Surprisingly, only about 46% of Americans have a will. Estate planning is invaluable to ensure your money and assets go to your intended heirs. Of course, you don’t want the inheritance to be consumed away by taxes or even be given to the wrong person, do you?

Estate planning tips are key to ensuring a smooth transition of your wealth to the next generation.

When it comes to estate planning, it’s never too early. With the right estate planning move today, you can make a world of difference later when you can’t make financial decisions. This avoids legal-ties, taxes and ensures your wealth is bequeathed as you wish.

Wait, so you think estate planning is only for the super-wealthy? Well, that’s a mistaken notion. You’ve been working so hard to accumulate your assets, and you want the right individuals to get it.

But how do you go about estate future planning? To get you started, here are 7 estate planning tips.

1. Inventory Your Stuff

If you think you don’t have enough to justify reasons against estate planning, it’s time to look around. You might get surprised by the intangible and tangible assets that you own.

Some of the tangible assets to check out include:

• Land, home, and other real estates

• Vehicles including boats, cars, or motorcycles

• Collectibles such as trading cards, antiques, art, or coins

• Other personal belongings

• Your intangible assets may include:

• Bonds, stocks, and mutual funds

Savings accounts, checking, and certificates of deposit

• Life insurance policies

• Retirement plans

• Business ownership

• Health savings accounts

After inventorying all your assets, it’s time to estimate their accurate value. If you are not sure how to value some of your assets, then seeking expert assistance is key. For instance, you can hire a home appraiser to determine the value of your home.

When you don’t want outside valuation, value them according to how you expect your heirs to value them.

2. Consider Your Family’s Needs

After you know what’s in your estate, think of how you can protect these assets and your family when you aren’t there. Be prepared to ensure that your family is secure financially.

Do you have enough life insurance? Well, the answer to this question will depend on various factors. This includes whether you have a family and your lifestyle. Life insurance is very important, especially if you have a child in college or one with special needs.

Also, it’s important to name your children’s guardians and backup guardians. This step is crucial to shun expensive family court fights which may outflow your estate’s assets.

If you have any wishes regarding care for your children, document them. Don’t suppose your family members will be there or even share your goals and ideas to raise the kids.

3. Create a Will

Drafting a will is the basic strategy of estate planning. This is the only way to let people know how you want the assets to be taken care of. The will include your wishes about the various accounts in your name and distribution of other assets.

Also, you will designate an executor who will oversee the will.

Without a will, your estate is divided in a probate court. This means the judge will take over the task of deciding who gets a share in your assets.

4. Check Your Beneficiaries

To avoid probate court, ensure you have named the beneficiaries of your assets. This way, your heirs will only undergo the court system to have the will reviewed and confirmed as valid.

Some accounts, such as life insurance and retirement plans, will let owners name beneficiaries to receive the amount. Remember, if the will designations differ to the beneficiary on the accounts, the latter stands.

5. Set Up a Trust

Suppose you own a sizable estate or have concerns your heir may squander the money, then consider setting up a trust. After setting up a trust, you appoint a trustee to distribute the wealth to your heirs.

While there are various ways a trust can be set up, permanent or irrevocable trusts enjoy significant tax benefits. The assets don’t belong to you anymore after putting your money in permanent trust. They will belong to the trust itself.

This means the money won’t be subject to normal estate taxes. And while a trust will control the money, you can create provisions on how it will be used.

6. Choose Your Team

Estate planning can be an overwhelming and intricate process. An estate planning attorney is invaluable to make the process plain sailing and avoid dire consequences. The attorney will counsel you and offer estate planning advice to ensure everything’s in order.

However, when making your choice, keep in mind not every estate planning attorney is perfect for you. It would help if you were clear-headed, knew what to look for and how to pick the best estate attorney to help you.

7. Power of Attorney

Important note to make, estate planning is not just about what will happen when you pass. It also involves documents to be used should you become incapacitated. This requires paperwork to assign a power of attorney to allow someone else to make decisions on your behalf.

It would be best if you designated someone you trust to handle these decisions. Also, involve an estate planning lawyer to ensure everything turns out as it should be.

The Above Are Some Key Estate Planning Tips for You

For a successful estate planning process, it’s crucial to start working early. While the whole process can seem overwhelming, working with the right estate lawyer can make it easier. Check out the above estate planning tips to kick of your estate planning journey.

Do you need assistance with estate planning? At Smith Barid, LLC, we got you covered. We are a process-driven, results-oriented law firm dealing with our client’s estate planning issues.

Contact us today for a free consultation.

 

Share:

More Posts

The Comprehensive Legacy Checklist

Ensure your estate is fully prepared for any eventuality with The Comprehensive Legacy Checklist. This essential tool is designed to help you and your family face the future with confidence, covering all critical areas from asset protection to healthcare decisions. Whether you’re setting up a plan for the first time or updating an existing one, this checklist highlights potential vulnerabilities and ensures nothing is overlooked.