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Easy-to-Follow Guide If You’re Looking for Estate Planning Tips

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estate planning tipsDid you know that the number of middle-aged Americans with estate plans dropped by 25 percent since 2019?

Did you drop the same estate planning ball your peers did?

You cannot be sure what happens to your possessions after you die unless you have an estate plan that gives you confidence.

Don’t put this off another day. Read these estate planning tips and take steps to protect your property.

Take Inventory

You may not believe that you have enough assets for estate planning, but you should know with certainty. Take the time to inventory everything you own. You’re going to be surprised.

It’s essential to note that this remains one of the most critical parts of an estate plan.

Separate your inventory list into two different categories: tangible and intangible assets.

Tangible assets include anything physical, for example:

  • Personal valuables
  • Collectibles from a hobby
  • Cars, boats, or motorcycles
  • Your home or investment properties

Intangible assets for your estate will include:

  • Life insurance policies
  • Individual retirement accounts
  • Savings accounts
  • Business ownership
  • Stocks, mutual funds, or bonds
  • Checking accounts

After you have a comprehensive list of your assets, you need to find the value.

Consider hiring a professional for an evaluation of your tangible and intangible assets. If you don’t take this step, be confident that you have planned a fair distribution of your possessions to loved ones.

Take Care of Your Family’s Needs

Do you have enough life insurance coverage? You may get annoyed when insurance salespeople ask you this question, but it’s a relevant point to consider nonetheless. If your current lifestyle requires two incomes or a child with special needs, you need to be confident in your policy.

Don’t name one guardian for your children. Adding a backup guardian can avoid court fights after your death that will eat away at your assets.

Legal Directives

Talk with your lawyer about establishing a trust. Avoid the risk of a court distributing your assets instead of your property going to your designated beneficiaries. If you set up a living trust, you will have the opportunity to use parts of your trust fund for what you need while you’re alive.

Establish your medical care directive or living will. People around you must understand your wishes if you’re no longer able to make decisions for yourself. Don’t forget to name the medical power of attorney for a loved one if you’re incapacitated.

Decide between a limited or durable power of attorney for your financial affairs. Limited powers give a named representative decision-making limits. Durable powers turn everything over to a named individual.

Only you can decide what’s best for your current situation.

Beneficiary Review

You want to ensure the right people take ownership of your assets. It’s easy to forget what you set up years ago for yourself. Take the time to review your documents with a lawyer, if you’re able to do so.

First, review your insurance and retirement accounts. You may need to update the beneficiaries to match what’s in your will. Don’t leave any beneficiary sections blank, or the state will decide through probate who receives your property.

If you haven’t, name your contingent beneficiaries. If your primary beneficiary dies before yourself, this could lead to a nasty court battle.

Research Estate Tax Law in Your State

The primary motivation for estate planning revolves around minimizing the inheritance taxes. If you don’t know your state’s laws, you may have a hole in your plan.

The federal government doesn’t tax estates unless they’re substantial. Starting in 2021, up to $11.7 million won’t incur federal inheritance taxes.

Does your state have an estate tax? Find out today and make plans with your lawyer to lessen their effects.

Consider Hiring an Attorney or CPA

For small estates with simple wishes, using an online service or will-writing program should work well. The right software will ask you interview questions and walk you through state and IRS requirements. You should have the ability to update this as you see fit, whenever you wish.

If you have any doubts, consider calling a CPA or probate lawyer. No one will know the state and local laws better than these professionals.

If you have a large estate or complex issues to resolve, don’t hesitate to hire professionals to ensure that you’re covered.

Don’t Forget About Capital Gains Tax

Earnings or income for your beneficiaries from your bequeathment can be subject to capital gains taxes. For any gift that involves profit for your beneficiary, it’s advisable to introduce them to your lawyer or CPA. You can only lower the tax for loved ones if you plan early with a professional who knows the state law.

Plan for Change

“No battle plan survives contact with the enemy,” a famous military strategist from Germany named Helmuth von Moltke once said.

You can say the same about life’s plans. During good times or bad, don’t forget to review your estate plan. If you’ve experienced job loss, the birth of a child, marriage, or divorce, sit down with your papers when you’re ready.

Laws and people change every day. Don’t allow your estate plan to fall behind the times.

Need More Estate Planning Tips?

Do you have another question that wasn’t in this post?

Do you have a complicated estate planning issue the requires a professional? Contact us today or give us a call at 706-724-0405. We’re happy to discuss more estate planning tips over the phone.

Don’t want to talk at this moment? Bookmark our blog for more great information about all things estate planning. We’ll be here when you need us.

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