Everyone ages, everyone gets older, and eventually, everyone has to prepare for the inevitable. To protect yourself, your assets and your beneficiaries, you must draw up an estate plan. This plan is an outline of who gets what, and it also details things that you want to happen when you are incapacitated or pass away. Here are a few tips for planning your estate the right way, so you can rest easy knowing it’s in place.
1. Create your will first
A will is more than just doling out assets. It’s a legal document that tells the courts you want these individuals to inherit your assets and not have to go through probate. If you don’t have a will, your beneficiaries may need to go through a lengthy court process to have the assets awarded to them. This could also cause a conflict, especially if there is contention over who receives what.
Your will may also have information on your Power of Attorney. This is the person who is designated to help if you are incapacitated. This person has the authority to make decisions for you and may have control of the assets in your possession if you so choose.
2. Focus on future tax needs
One thing that many people forget about is the fact that an estate is open to taxation. Using specific strategies can help you and your beneficiaries save money in the long run by reducing tax liability. For example, you can give your beneficiaries items when you’re still alive, making those gifts nontaxable as long as they’re under your state’s specific limits. Your attorney can let you know if a gift you want to distribute is too large to avoid taxation.
3. Don’t forget Fluffy
Some people believe that their families will take care of their pets long after they’re gone, but the truth is that no one knows for sure. Creating a pet trust helps you relax and know that your pet will receive the care it needs in the event of your passing. These trusts can have assets, like dog beds and items, or they can include money for the care of your pet. Preparing this way helps you know your loved pet won’t go without. You have the option of leaving compensation in the trust for the caretaker, too.
Your attorney can help you with all aspects of estate planning, so you know what is to happen after your death.