67% of people don’t have estate plans. Trust us, you don’t want to be one of these people. When a person has no estate plan, the government will decide what happens to their money and belongings.
What the government decides may or may not follow your wishes. And it could leave your family members without what they need. Or they may need to fight hard to get what they need.
Estate planning can save your surviving family members a lot of stress, time, and money. It can also give you peace of mind. Read on to learn how to tackle this challenge.
What Is Your Estate?
Your estate includes every last tangible asset you own. This can include your personal belongings. It also includes intangible assets such as patents, licenses, and copyrights.
When you die or can’t take care of yourself, these assets will need to go to someone. An estate plan will help you assign assets to different people.
What Is an Estate Plan?
Physically, an estate plan is a collection of legal documents. These documents outline what should happen should you die or can’t take care of yourself.
In the case of the former situation, the documents can outline what will happen to your assets. The guidelines usually explain who will get your assets. In some cases, you may want certain assets destroyed.
In the case of the latter situation, the documents will explain what kind of medical care you want. They will also say who will need to take care of the estate.
Who Needs an Estate Plan?
Everyone needs an estate plan. You may think that you’re too young or that your family will know what to do. Neither of these are true.
You’re Not Too Young
Death comes to everyone, no matter how young and/or healthy. If you have any kind of money or property or both, it needs to go to someone.
Plus, getting your affairs in order sooner than later can save you money. Some people may want to get a life insurance policy on top of their estate plan. It’s cheaper to get one of these in your 30s than in your 50s and 60s.
Your Family Can Act Erratically
You may think that you know your family well. They’ll just let your assets go to your spouse and/or children. Or they’ll follow your verbal instructions to donate all your assets to your favorite charity.
The problem is that people can act differently around money and property. They can fight with all their might to prove why your assets should go to them. Things can get very nasty.
It’s best for people to have legal instructions that they need to follow.
What Happens to Your Estate?
When you die or become unable to take care of yourself, your estate may go through a thorough a probate process. This is the process of verifying the legality of your will and ensuring your final wishes are carried out.
Even if you have a will, your estate will still go to probate court. If you have a will, the court involved with the process will use it as a guide. If you don’t have a will, the court will use local laws to decide how to distribute your assets.
The probate process should go by quickly if you have a small estate. However, if someone contests your will, the process can drag on for months.
If you don’t have a will, the probate court will appoint someone to handle your estate affairs. If you do have a will, you should have appointed a person as an executor. They will manage your tax bills, paying off debts you owe, and distributing assets.
People often ask a close relative to handle their affairs, but you can appoint anyone. Just make sure you have some backup executors as well. Nominated executors can decline their position.
Your executor will take care of any taxes that your estate owes. If your estate earns an income, your executor will need to file an income tax return, deal with property taxes, etc.
If your estate is very wealthy, your executor will also need to deal with estate taxes. These are taxes that an executor must pay before distributing anything to your heirs.
If you have less than $12.92 million, you shouldn’t have to worry about an estate tax. But this exemption can be lower depending on the estate. Be sure to check up on your local laws.
Steps for Estate Planning
So how do you go about getting your affairs in order? Try following the steps below:
Make a List of Your Assets
Create an inventory of everything you own. This should include the following:
- Bank accounts
- Real estate
- Digital assets
- Personal property
- Insurance policies
- Debts you owe
Make Your Estate Plan
Use the record of all your things to create an estate plan. Think of the beneficiaries you want to pass your assets along to. Think of back-up beneficiaries you want to give your assets to if your initial beneficiaries have predeceased you.
Using a professional to create your estate plan will make certain that your plan is 100% legal and bulletproof.
Execute the Plan
For many people, you may just need to sign a few documents. For others, you may need to sell property, change the names on titles, etc.
Keep Updating Your Plan
It is important to review your estate plan every few years to make sure your plan stays up-to-date with life events.
Estate Planning Assistance
The bottom line is that if you have assets, you need an estate plan. If you don’t, you will have no control over where all your assets will go. You owe yourself the peace of mind that comes with estate planning.
Do you need help with planning your estate? If so, consider using our services. We have helped citizens of the Augusta, GA and Aiken, SC, areas with lifetime and death planning for over 30 years.
Contact us today for more information.