Many of us don’t like to think about what will happen after our death. Unfortunately, death is the one certainty in life. It’s a good idea to think about the legacy you want to leave and how you want to ensure support for the people you care about.
Estate planning allows you to tell the world how you want your financial resources and belongings handled after you’ve passed away. While it’s easy to set it aside for later, this is not a process you want to risk leaving until it’s too late. Now is a great time to learn about your estate planning options.
In this guide, we’ll teach you all about when you should begin planning your estate, whether you need an attorney, and how to avoid common estate planning pitfalls.
What Is an Estate, and What Is Estate Planning?
An estate is the sum of everything a person owns. Estates can include everything from your home and car to your bank accounts, life insurance policies, and other possessions. Anything you personally and definitively own is part of your estate.
Estate planning is the process of arranging what will happen to your belongings after death. Typically, estate plans aim to preserve wealth for beneficiaries such as your loved ones or favorite nonprofit and maintain flexibility while you’re alive. Estate planning includes writing a will, but there’s more to it than that.
Your estate plan should also cover what will happen if you become seriously disabled before you die. It can include plans for paying for medical procedures and specify who will get power of attorney over you if you cannot care for yourself.
Estate planning typically involves meeting with an attorney to make plans and set them down in a clear legal document. You will need to consider:
- Which of your loved ones will get specific assets and possessions, especially valuable or sentimental items.
- What will happen to your minor children, pets, or other dependents.
- Whether there are any parting gifts you wish to leave to your friends and family.
- What will happen to your liquid assets, including bank accounts, investments, and retirement accounts. You may wish to divide the money between loved ones, establish trust funds for your children and grandchildren, or donate to charity.
- How you will pay for your funeral.
- What health care directives you want to give to physicians, such as a do not resuscitate order.
- Who you want to be your estate administrator or executor.
You want to consider and make decisions on all these issues before you pass away. Formalizing an estate plan will help ensure that your decisions are carried out.
Estate planning can give you peace of mind for when something unthinkable happens. It also allows you to minimize unnecessary legal fees, taxes, and court costs for the people you care about.
Drafting a Will
A will is a document that determines how your assets will be distributed and how your dependants will be cared for. Wills are relatively inexpensive estate planning documents to compose, although it depends on the complexity of your assets.
To make sure your wishes will be recognized under the law, you need to sign and date the will in front of two non-related witnesses. These witnesses should also sign the will. You will also need to get the will notarized, or certified by a licensed public officer, to establish that the signatures are authentic.
If you don’t plan to keep the original of your will at home, you should at least keep a copy of it in your house. Make sure that other people know where the will is so they can access it when it’s needed. Your estate administrator should get their own copy.
When to Begin Planning Your Estate
The best time to begin estate planning is now. Even if you’re young, you already have an estate — yes, your bank account and car count!
If something unexpected happens and you don’t have a legal will, it will be much harder for your survivors to settle your affairs. It’s also wise to make decisions about future care, even if you don’t think you’ll need it any time soon.
The sooner you begin planning your estate, the better. Once you have a plan in place, it will be much easier to make changes later if your needs shift. Keep in mind that estate planning is not a one-time thing — your plans will likely change over time as your relationships and assets change. You may wish to add a new child or grandchild to your plan, use a different financial strategy, or alter your power of attorney arrangements.
The important thing is to start planning your estate now so that your loved ones are taken care of even if something unexpected happens.
Do You Need an Attorney?
Estate planning is important, and you shouldn’t do it on your own. It’s not uncommon for money and belongings to wind up in different hands than the original owner wanted because of an unclear or poorly written will.
An estate planning attorney will help you create a clear, well-written estate plan so your loved ones can avoid any issues. They can guide you through the estate planning steps, including how to cover assets you may have forgotten about. With an attorney’s help, you can make your wishes known and ensure they will be respected.
An attorney with special expertise in estate planning and will drafting can make all the difference for your future, so make sure the person you hire is experienced and trustworthy. Check out our recent blog post for more estate planning tips.
Start the Estate Planning Process Today
It’s never too early to begin the estate planning process, even if you are a young adult. Dividing assets such as bank accounts and belongings, establishing your living will, and planning for trusts and donations are ongoing processes. The sooner you get started, the better.
Your estate planning attorney can offer guidance throughout the entire estate planning process. A professional estate attorney from a reputable law firm will look out for your best interests and help you catch potential problems.
At the Anderson Hunter Law Firm, we are here to help you plan for your future and legacy. Our law firm has significant expertise in complex estate and tax planning, including business ownership and transition considerations. Contact us today to start working on your estate plan.