Understand the Basics
You have spent your life building relationships, cultivating partnerships, and accumulating assets. This is what makes up your “life’s work”. Unless you have an estate plan in place, everything you have spent your life building and creating can be put in jeopardy.
The purpose of an estate plan is to ensure that your wishes are fully and faithfully honored if and when it becomes necessary. Having an estate plan helps guarantee that your possessions, property, and assets will go to your intended recipients, your estate will be settled with the smallest tax burden and least red tape possible, and you and your family will be protected in the event of the unexpected.
The earlier you begin thinking about estate planning, the better. An estate plan should not be an end-of-life consideration, but rather it should be something you think about throughout your life and adapt as the years pass. Here are some basics to keep in mind as you get started:
What Your Estate Includes
Your estate is probably more complicated and substantial than you realize. It includes your property, investments, business interests, and savings plans. It will also encompass your debts and other obligations. Understanding exactly what your estate includes is an important perspective to have early in the estate planning process. The details will become important as you determine how to divide your estate in a way that serves your interests.
Who Will Your Heirs Be?
You will need to determine who you want to leave your assets to, whether it be too specific individuals or organizations. An important component of estate planning is defining your beneficiaries and making your intentions explicit. You also need to determine if there are specific assets you want to go to specific individuals. Keep in mind both who you want to benefit and who will depend on the support of your estate over the long term. Sometimes we treat our children equally, and sometimes some children may need more assistance than others.
You should also consider how your assets will be distributed. In some cases, assets should be held in trust for a child or child until they reach a more mature age. The appropriate age is largely a personal decision, but many find age 25 (or older) to be a good starting point.
Who Will Act as Guardian for Your Children?
This is one of the most important aspects of an estate plan. If you have minor children, you will need to appoint a Guardian for your children in your Will. Without this safeguard, a court would be required to make this determination, and there is no guaranty that a court would pick the same person as you would. Rather, you should name someone who you would be comfortable with in your Will.
How You Want Care
An estate plan establishes important protections for you and your family during your lifetime. If you are incapacitated due to illness or injury and unable to make decisions for yourself, you will want someone you trust to have the ability make decisions and act in your place. With a power of attorney in place, big and small determinations about your care, treatment, and finances will not be left up to uncertainty. Even if you are young and healthy, you should think about who you want to represent you in case of the unexpected. Once you are 18, you are legally an adult, so you will want to name someone to legally act for you.
Effective estate planning requires you do some deep thinking and make a number of carefully considered decisions. It also requires the help of an attorney who can turn your wishes into legally enforceable documents. To receive guidance and counsel throughout the process, contact an experienced estate planning attorney at Schloemer Law Firm.