Estate Planning Essentials You Should Know

May 23, 2019

Estate Planning Essentials You Should Know

Below, we’ve outlined the ABCs of estate planning. We’ve defined the technical terms and answered the critical questions that would have a bearing on whether your estate plan achieves your goals.

What is your estate?

Your estate includes all the property that you own at the time of your death. Estates vary enormously. For example, estates that exceed certain amounts are often subject to state and federal estate taxes. At your death, the value of your estate will be determined. Retirement benefits, life insurance and personal properties are assets that could potentially contribute to an estate tax issue. Federal estate taxes can be substantial, but the floor is so high, relatively few people end up paying it. State floors may be lower, however.

Estate planning, don’t procrastinate 

It’s easy to understand why many people put off estate planning as long as possible. Dealing with life-and-death issues isn’t easy. Nevertheless, we urge you to take the necessary proactive steps to relieve family members of the burden that would result from delaying estate planning.

Procrastination can cost you the opportunity to save taxes and determine who will receive your property upon your death. Whether your estate requires complex planning involving trusts, or a simple will, we urge you to tap our estate-planning expertise. You’ll enjoy the peace of mind that comes from knowing your children will be cared for and that your property will be disposed of according to your wishes.

For more reasons on why you shouldn’t procrastinate, check out our article: 6 Reasons Why You Need An Estate Plan

Care of children

If you die tomorrow, who is best-suited to raise your small children? Potential candidates can include siblings, parents, aunts, uncles and close friends. Important considerations include candidates’ ages, health, financial position and, most important, the quality of your relationship with potential candidates. For minor children, parents can choose a guardian in their will. Keep in mind that without a will outlining who you would like to care for your children, you risk having a court appoint someone who may not be your first choice. This could potentially lead to a battle among your surviving relatives over the custody of your children.

Also consider establishing a trust for your children, so assets will not be distributed to them if they’re too young at your death. The trustee cares for the assets until some point in the future when your children will be mature enough to handle the assets themselves.

Importance of a will or trust

A will is a series of instructions about how you want your estate distributed after your death. But it is only the beginning. Many families should explore trusts, which can offer a lot more power and flexibility into your estate plan. For example, they can help you avoid probate. It is well worth speaking to an attorney about how trusts can enhance your estate plan.

Health care proxy

This is a legal instrument that allows you to designate another person — typically a family member — to make medical decisions for you if you become incapacitated or incompetent. It can save a lot of trouble and heartache for your family.

This is just the beginning of what you need to consider. We’d be happy to help you apply these basics to your situation.

 

For more information about The Hayes Law Firm, visit our Google My Business web page.

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