It is a common misconception that estate planning is only something that the extremely wealthy do. While the richer you are, the more you may have at stake, estate planning is really something that everyone should consider.
The process of determining how your assets will be divided and planning for tax implications after you pass is important for everyone, regardless of the overall value of your property. Estate planning allows you to pass the most value to your loved ones possible while also avoiding negative tax consequences.
Planning for the Things and People You Value
Your property may have more value than you might think. Keep in mind that any interest you have in assets like retirement accounts, businesses, life insurance policies, and your home can be passed through your estate. Why it may not seem like much in pieces, it total, it can be significant.
Determining who will act on your behalf is part of the estate planning process as well. For example, estate planning also considers how medical and financial decisions will be made if you become incapacitated. If you have children, estate planning also means deciding who will care for them in your absence. This is a vital decision that should not be left to chance—you should create a strategy that addresses these concerns as part of your estate planning process.
Making Things Easier on Your Family after You Are Gone
Having an estate plan in place makes administering your assets after your death easier and faster for your loved ones. For many, sorting through property after a loved one’s death can be extremely painful. However, when the loved one has a definitive plan in place, this process is often easier to handle.
Without a plan, loved ones may also get into disputes about who will get what or what you would have wanted. You can avoid this potential conflict after you pass by creating a plan that explicitly lays out how you want your property administered.
Changing Your Plan to Meet Your Fluctuating Needs
Even if you created an estate plan when you were younger, it will likely need periodic updating. The estate planning process is a fluid one, and it should be adjusted as your life changes. After every major life event, such as a marriage, birth of a child, or addition of valuable property or assets, you should revisit your estate plan to determine whether it still meets your needs. You do not want to leave everything to an unintended recipient, such as an ex-spouse or individual who has predeceased you.
Even if your life is not changed much, particular state and federal laws may change and alter the effects of your estate plan. Checking in on your strategies periodically is a good idea for an effective estate plan.
Getting the Legal Help You Need
Everyone can use an estate plan, whether you are extremely wealthy or have just a few assets, and whether you are young or old. An estate planning attorney can help you develop a strategy that will meet your unique needs.