Estate planning can be difficult, and while it is commonly associated with high-income individuals, it is not exclusive to the wealthy. People of average and below-average income can also benefit from the process. Estate planning considers everything in your possession when you designate your assets which can be surprisingly high to some individuals. In addition, estate planning allows you to allocate responsibilities to your closest friends and families should you pass.
By planning your estate designation ahead of time, you can minimize the amount of taxes your beneficiaries will be responsible for and any fights over your properties. With estate planning, you can also appoint the person who will administer your financial and healthcare affairs should you become incapacitated.
To help you get started, here’s everything you need to know about estate planning.
Document Your Estate
Estate planning is less about the wealth you have and more about doing the most with what you have. Many people are surprised by the number of assets they have in their life, both tangible and intangible. This is precisely why estate planning is important, as it forces people to realize what they have.
Some common tangible items that should be included in your plan are real estate, vehicles, and personal valuables (jewelry, art, antiques, etc.). Intangible items that are often included are the amounts in checking accounts, stock funds, life insurance policies, and any other forms of savings (retirement or health included). These are just general items that are included in many estate portfolios, but yours can be less or more extensive. When you have gathered all of your estates, be sure to estimate their value either by outside appraisal (preferred) or with your own thoughts. This will help you decide how to divide the items between your beneficiaries. If you have items that are not financially valuable, you can consider how valuable the item will be to your beneficiaries.
Consider Your Family Members
After you have considered your estate, you can approach how you should proceed in terms of family life. One of the most important considerations is a life insurance plan. This allows your spouse and children to maintain the lifestyle they had prior to your passing. If you have children, consider who will be the guardian for your child if you and your spouse pass. If there is also something you wish to have followed, it will do you well to document your wishes.
Aside from a life insurance plan, you can set up other estate planning tools to protect your loved ones when you die. For example, a spousal bypass trust can be an excellent option. It refers to a trust which can be set up on behalf of the surviving spouse as one of the beneficiaries. A spousal bypass trust can be used to receive death in service insurance, an occupational benefit provided by an employer. The designated beneficiary receives a lump sum that’s two to four times the deceased employee’s salary.
Choose Your Directives
One of the greatest ways to delegate your estate is through a trust. Trusts can be living as well, where a portion of your estate is donated to your beneficiaries when you are alive. Your trust will instantly grant the beneficiaries their portion of your estate, and there will be no need for further delegation. Irrevocable trusts are also an option for those that want to plan their estate. They cannot be changed by their creator, which can be both beneficial and scary, so it should be a choice that is highly thought over.
Medical care can often be a considerable choice since those who are estate planning are often older and may require more medical care. It is often recommended to list out how you would like your medical procedures to follow if you are incapable of making the decisions yourself. You can also assign a person to make the medical decisions for you.
Having a financial lawyer can be a great way to manage your finances if you believe you will soon be unable to dictate your own finances (generally for a medical reason). You can designate your lawyer as the person that stands in for you in situations (legal, medical, financial, etc.) where you are unable to act on your own behalf. They can also manage your assets and pay your bills.
Choosing a Probate Lawyer
Finding a probate lawyer can be difficult because the last thing you want to think about when you are passing is someone who is not your loved one, delegating the process of your estate. It can also be a costly process, but it is well worth the benefits if you have a sizable estate. Probate lawyers can help you navigate difficult tasks, and when the time comes, they will also be able to handle the difficult position of delegating your estate. Many states do not have an estate tax, including California, but estate planning remains difficult for wealthier individuals. The Werner Law Firm, a firm specializing in connecting people with a probate attorney in Westlake Village, believes that estate planning can be a difficult legal process without a lawyer who understands entrusted wealth rights and probate laws. Having a probate lawyer that will work for you and your will can be freeing. In addition, they can authorize your distribution and further determine your estate if it is unaccounted for.
However, you should take your time when choosing your probate lawyer. Conducting thorough research is essential in finding the right one. Hire a lawyer with years of experience and expertise in estate planning and probate law. Read some client reviews online to know what their previous clients had to say about their legal services. Also, schedule a free consultation to learn more about your prospective probate lawyer and determine if you can be comfortable working with them.
Conclusion
If you want your loved ones to be financially protected after your death, create an estate plan as soon as possible. With estate planning, your family can avoid financial issues, including substantial tax burdens.
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