The Right Time for Estate Planning
- Posted in: Estate Planning
As estate planning attorneys, we are often asked, “When should I do my estate plan?” The answer is: “Anyone who is over the age of 18.”
Estate planning is critical to everyday living for adults over the age of 18, and should be one of the priorities regardless of your age or marital status. If you have not yet planned your estate, we encourage you to do so right away. It’s important to prepare for the unexpected. Remember that ole saying, “tomorrow is not promised?” If you think about it, what would happen to your children, your home, and all you have worked for in the event of your unexpected death or disability if you don’t have an estate plan in place? Let’s go over the basic estate planning that everyone should consider.
–A Will to establish what would happen to your assets. It also names the guardian for your children. Dying without a will is called dying “intestate,” and gives you no voice. It can be costly to your heirs and can bring with it issues such as family dissension and probate court intervention. Even if you have a trust, you still need to take care of any holdings outside of that trust when you die.
–A Durable Financial Power of Attorney to handle your financial affairs in case of incapacity.
-A Healthcare Directive to specify the measures that can or cannot be taken to sustain life, and to make medical decisions for you in the event you are unable to do so.
Depending on your individual circumstances, here are some additional areas of estate planning you might wish to consider:
-A Revocable Living Trust. If you hold property in a well crafted living trust, your survivors won’t have to go through the probate proceedings, which can be a very lengthy, stressful, and expensive process.
-Planning For The inheritance of Your Children. It is always wise to name an adult to manage any money and property your minor children may inherit from you.
-File Beneficiary Forms. Appointing a beneficiary for all bank and retirement accounts make those accounts automatically payable at death to your beneficiary, thus bypassing the probate process.
-Secure life Insurance. If you have children, own a house or have substantial debt or estate tax, life insurance may be a great choice. For example, in addition to helping to support the minor children, life insurance can help provide immediate cash at death. Insurance proceeds are also a good source for paying your debts, funeral expenses and income or estate taxes.
-Understand Estate Taxes. Due to the increase in the amount of exemption amount, most estates will not owe federal estate taxes, because this tax is only imposed on persons whose taxable estate is worth more than 5.25 million (for 2013). For deaths occurring in the year 2012, the exempt amount is 5.12 million. Married couples can transfer up to two times the exempt amount tax-free. Also, property left to a spouse (must be U.S. citizen) or tax exempt charity is not subject to the estate tax.
-Cover Funeral Expenses. An account can be established at your bank where funds can be deposited to pay for funeral expenses.
-Business Protection. If you are a sole proprietor, setting up a successor plan is crucial. If you are in a business partnership, you should consider creating
If you don’t have an estate plan, or have an existing estate plan that needs to be reviewed and updated, please contact our office and we would welcome the opportunity to assist you.