Your estate can lose about 3%-8% in value if you don’t have an estate plan. The loss in value is due to probate costs and legal fees that you could have avoided with estate planning law.
Estate planning saves time, money, and hassle while enabling you to align it with your other financial planning. It also helps you to make better investments that can profit you or your heirs.
An estate plan is an essential tool that can help you avoid unnecessary stress and hassle in the months and years ahead. Estates are complex, and planning for your financial future is not always easy. You must ensure everything is in place, including a will and trust.
You’ve heard the saying, “the best time to plant a tree was 20 years ago. The second best time is now.” Estate planning is one of the most important steps to ensure your family’s future security.
Read on to discover how successful people make the most of their estate planning law.
1. Start Planning as Early as Possible
Estate planning can benefit anyone, regardless of wealth or income level. The best part is that there are many ways to get started on this critical task. Estate planning is planning for the future to ensure that your assets are distributed according to your wishes.
Estate planning is complex. If you are thinking about leaving a legacy to your family, friends, or charities, take the time to plan. The earliest you start planning, the better. This will give you enough time to ensure everything is done correctly.
You can start planning at any age, but many people wait until they are married or have children.
2. Find a Trustworthy Lawyer
To start, find a trustworthy estate planning law firm who can help you with your legal needs. You don’t want to trust just anyone with this task because it could cost you more money in the long run than if you had hired someone who was an expert in the field.
They should be well versed in estate law and should have other skills similar to those you would get in an elder estate planning law firm.
Ensure that you can trust the lawyer who is working on your case. This means they should be experienced and knowledgeable about estate planning law to ensure everything goes smoothly.
A good attorney can help you determine the documents needed for your specific situation. Your attorney will help you ensure that your wishes are carried out and that taxes, insurance, and other financial matters are taken care of.
3. Draw Up a Will
When you think about estate planning, it can be easy to dismiss it as something that’s only for the rich and famous. You may have worked hard all your life and built some savings, but do you have a will or a trust?
Estate planning determines how you want your assets — and your family’s assets — distributed after you die. An estate planning document is a formal plan that details how you want your assets distributed in the event of your death. It includes a will, a trust, and a living trust.
A will sets out the instructions for how your property will be divided among beneficiaries (usually children or spouses). It also specifies any special instructions about handling specific types of property or assets.
A trust distributes assets over time and generally preserves the status quo for a while after death. A trust can be created with a bank as a trustee or by yourself as a grantor.
Living trusts are similar to trusts but are revocable (you can revoke them) and allow all types of assets to pass through living individuals who aren’t beneficiaries under a will or trust.
4. Create a Power of Attorney Document
The most important part of estate planning is ensuring you have the right power of attorney document. This document gives someone else the authority to act on your behalf if something happens to you, such as if you become incapacitated or disabled.
These documents designate who will receive your assets upon your death and any other instructions needed for managing them through probate court proceedings. You’ll need one for each person who needs to be involved in decisions about your estate — including yourself!
5. Update your Beneficiaries and Choose Guardians for Minor Children
In addition to naming a power of attorney, it’s important to update beneficiaries on your insurance policies and other financial accounts, so they know who will get what when something happens.
If you have minor children, you should name guardians for them so they won’t end up stuck with a burdensome bill from a parent who gets sick or dies unexpectedly.
6. Pay Attention to Changing Tax Laws
Tax laws are constantly evolving, so staying abreast of any changes that might affect you or your family members is essential. You may also want to consult with an attorney if you have any particular circumstances or concerns.
Many states have enacted tax laws that affect how an estate is handled after death. These laws include capital gains, inheritance, and generation-skipping transfer taxes. In some cases, these changes can be beneficial; however, they can also increase estate administration costs significantly.
It’s essential to check with an attorney before making any changes to your estate plan.
7. Organize Physical Documents and Assets for Succession Planning
Once you have access to a will or trust, it’s time to organize documents such as deeds, mortgages, insurance policies, retirement accounts, and other financial assets into one place.
If you have children, it can be helpful to organize physical documents and assets in a way that makes sense for your family unit — such as keeping birth certificates, marriage licenses, and other documents together in one place. This will help make it easier for your beneficiaries if they need them later on down the line.
8. Ensure You Have All Necessary Legal Documents Signed and Notarized
Ensure that all the legal documents necessary for your estate plan are signed and notarized by a lawyer experienced in estate planning law. This ensures everything is recorded correctly within the legal system and prevents disputes over ownership or responsibility for assets.
Estate planning law is about more than just your financial affairs. It’s about protecting your loved ones and setting up a plan that allows you to make sure they’re taken care of in case of your death.
Estate planning is a critical part of establishing your legacy. It ensures that loved ones are cared for and protected if you cannot do so yourself.
Estate planning is a complicated process that can be overwhelming at first. But it doesn’t have to be. You can make your family’s future easier by enlisting the help of a family law attorney experienced in estate planning law.