Legal Tips and Resources
No one really likes to think about “what happens when I die.” It’s an uncomfortable question whether you’re 25 or 75. When you think about the future for your family, it helps them avoid taxes, court costs and even relationship problems. Most Americans don’t have a will, let alone an estate plan. So how do you know what you need?
Do You Need an Estate Plan or a Will?
A will is a legal document that outlines your wishes as to the distribution of your estate. If you have assets and a family, a will is a good start to your financial planning. An estate plan goes a little further. Not every family needs an estate plan, but everyone should have a will.
Here’s what you should consider when deciding if you need an estate plan:
- The size of your estate and where you live.
Estate plans are important for people with a lot of assets. If your state has estate taxes, you can often avoid placing a tax liability on your heirs by setting up an estate plan. You have to know the rules where you live and the amount your heirs would inherit.
- Do you have children?
You can set up guardians for your children in a will, but you can protect your assets for your children more effectively with a trust. It depends on the age of your children, their maturity to handle a large inheritance and your own wishes.
- What type of assets you own.
IRAs have different types of rules about distribution than real estate. The age of the beneficiary is considered. You should look at your assets and who is receiving them.
- Probate concerns.
Estate plans can minimize probate and ensure privacy of your estate. Probate can often take up to year or more and the court records are public. Plus, your heirs could pay 5% or more of the estate’s value to settle the case.
- Life stage.
Estate plans and wills should change as your life changes. New parents have different considerations than senior citizens whose children are out of their home.
- Business planning.
An estate plan can name business succession plans, which is a huge consideration if your family owns a business. You can determine what happens to your business at your death.
Contact an Attorney to Get Started
Your estate lawyer is a great resource to help you plan for the future. Protecting your assets for your beneficiaries can make a real difference to your children, both financially and emotionally.