No one wants to think about the end of life, but everyone should put their end-of-life wishes into writing. Making an estate plan isn’t just for the wealthy and it is not limited to a last will and testament. It can prevent unpleasant family disputes, take care of your dependents, and can ensure that you’ll be cared for if you should become incapacitated.
Estate plans are individualized based on your situation and objectives. Consider the following when determining if you could benefit from an estate plan.
1. Distribute your assets
The most obvious reason to have an estate plan, of course, is to distribute the wealth you’ve acquired—even if you don’t consider yourself “wealthy,” you probably have bank accounts, retirement, life insurance, and other property that you wish to distribute. If you have equity in your company or a stock portfolio, you’ll want to designate how that’s divided as well.
Your wishes need to be clearly outlined so that there’s no mistaking how you wanted your property to be dispersed. Having a clear estate plan is like having a road map: it helps prevent family fighting and confusion in a time of grief. It also saves the courts and your beneficiaries time and money – dying intestate (without a will) means that the courts, not you, will decide who gets your property.
2. Take care of minor children and dependents
When you have children, you must consider the possibility that you and their other parent may not be able to raise them to adulthood. Likewise, with an adulut dependent, there may be a time where you can no longer care for them. An estate plan can be used to assign a guardian for them. This lessens the likelihood that a court will have to step in and find a guardian themselves. Although no one likes to contemplate the prospect, you’ll rest easier knowing your children and dependants will stay with someone whom you trust. Read more about Guardianship.
3. Provide for your own needs
Should you become incapacitated, unable to work or adequately express your health care wishes, an estate plan can help provide for your own needs. It can help to set aside money that you may need in the future and include a plan for your health care preferences. In addition to a health and financial plan, an estate plan can designate a health care proxy and durable power of attorney.
4. Limit tax liability
There are several kinds of taxes that can apply to your estate: the gift tax, the estate tax, and the generation-skipping transfer tax. Both the state and the IRS have limits on how much money can be transferred before it’s subject to being taxed. Estate planning can help strategically minimize your loved ones’ tax liability. Read more about Advanced Estate Planning.
5. Set up philanthropic legacies
Many people wish to preserve their own legacy by designating a certain amount of money or property to philanthropic organizations. Whether that’s a scholarship fund, donations to museums or other ways to give back to your favorite communities and charities, a good estate planner can help you decide how your wealth can be used to its greatest potential.
Baker Law Group, P.C. specializes in estate planning and can help you to create an individualized plan – from writing a last will and testament to protecting your home and assets. Our attorneys are skilled at handling all issues estate-related, including probate, asset protection and elder law services.
We offer a complimentary initial consultation.