What to Consider When Beginning Your Estate Planning

Thu, Mar 22, 2012

Estate Planning

What to Consider When Beginning Your Estate PlanningFirst and foremost, all estate-planning professionals recommend a detailed will. While there are kits available to make your own will, they will not come with seasoned professional advice. If you have numerous assets and specific desires for how they should be distributed, it is recommended you create your will with the help of an attorney.

While creating your will, make sure you have a good inventory of your assets. These include savings, investments, real estate properties, businesses, personal property (like heirlooms), etc. Dying without a will is one of the worst things you can do for your heirs, as it will be more costly and creates tension or disagreements about your property and assets. Many professionals suggest discussing your finished will and distribution of assets with your heirs, rather than having them find out about them for the first time when the will is read. This decision is up to you of course, but should be something your consider, depending on your family dynamic.

Blended families are another thing to consider when beginning estate planning. Are you remarried? Do you or your children have stepfamilies? If you have specific desires for how your estate is to be divided, the answers to these questions might matter to you when planning your estate. Sometimes, a trust is the best way to solve complicated situations since they can be very specific and have a designated trustee who oversees them. Trusts are a great way to take care of a surviving spouse, yet also provide for your children. Trusts are also some protection against a costly probate proceeding, something your heirs will thank you for. There are many types of trusts, and once again, they should be created with an attorney who can give you detailed advice.

Another part of estate planning involves probate discussions. Advice from an attorney will help you create a will and accompanying estate plan that should reduce probate as much as possible. A trust might be considered, as might charitable gifts and personal gifts to friends and families. It is a great idea to think ahead about reducing probate. Along with probate comes taxation issues—make sure you consider the effect the IRS will have on your estate.

Something you may not have considered is that our increased length of life makes power of attorneys and health proxies more important than ever. Do not leave control of your final days in the hands of someone you do not trust because you did not plan. These documents and ramifications can be complicated, so make sure you research each type carefully and discuss with your attorney. Living wills are also often part of estate planning too, since you make this type of life or death decision before the event and leave it out of the hands of your family during a difficult time.

Long-term care insurance is another worthy discussion. Financial planners and attorneys should be able to give you advice on whether it would be good in your situation. One more thing–since length of life is increasing, you might one day find yourself in need of Medicaid benefits for nursing care. Make sure you have also discussed this with your estate-planning attorney, as there is something called the Medicaid look-back period you should be aware of it. It might guide your decisions about giving away money or creating certain financial arrangements.

Those interested in leaving as much as possible for their heirs, yet living a comfortable lifestyle at the end of their life, need to start planning. SmithLaw has seen first-hand how a little estate planning now can create lasting peace of mind.

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