What is estate planning?
In its most simple form, estate planning is about peace of mind. Estate planning is all about putting the right structures in place to make sure your assets are distributed the way you want and in an effective way.
Why should you estate plan?
An estate plan involves much more than a simple Will. Although it's important to have a valid Will, an estate plan covers many other aspects relating to the transfer of your wealth after you pass away. Family trusts, powers of attorney and the tax implications for beneficiaries can all be managed with an estate plan. An estate plan can do the following for you:
- Ensure your assets go where you want them to go
- Specify who will care for your children
- Eliminate family disputes over your assets
- Minimize estate and other transfer taxes
- Ensure you and your affairs will be taken care of if you become incapacitated
Determine the value of your home and other real estate, automobiles, jewelry, art, or any other assets you may have. Determine the value of your 401k, savings, stocks, bonds, insurance policies, etc. Then, list all of your liabilities such as mortgage and credit cards.
Define estate planning goals
Before you go to an attorney, you will want to answer a few questions so save yourself some hassle.
- Who do you want your assets distributed to and who gets how much?
- If the heirs are not living at the time of your death, who get's their share?
- Who do you want taking care of your children?
- How much do you want to put aside for childrens education and on going care?
- Who will make decisions for you if you become incapacitated?
Get an attorney
Once you think you have a plan set, it's time to make it official and get a estate planning attorney to draft your estate plan. An attorney will review your objectives and explain the tools—wills, trusts, powers of attorney and more—you can use to help accomplish your goals. Many of these documents are fairly standard in format, which can substantially reduce the cost of developing your plan.