National Estate Planning Awareness week was established to help people understand the importance of having a plan in place to protect their assets and loved ones. 66% of Americans do not have an up-to-date will.
There are many misconceptions about estate planning that it only applies to older people, and that someone needs sufficient assets to make the process and expense worthwhile. An estate plan can be simple or complicated. For some people, it can be as simple as having a will to describe how your assets are divided at death and who will be the guardian of your minor children. This applies to singles and any age adult.
For a husband and wife, an estate plan is necessary so there is a smooth transition of assets to the spouse that remains. Following that spouse’s death, instructions are left on who receives the assets. People with complicated circumstances, such as those owning a business or having lots of assets and goals, second marriages or blended families, may need a trust to administer the assets after death or even a combination of different trusts to address your goals.
Let’s say you want to leave money to your grandchildren but don’t want them to have it until they reach a certain age or accomplish a particular goal. What if you have no children and wish to leave your assets to charity? An estate plan is instructions in a particular language that ensure your wishes are followed and cannot be challenged by creditors, unhappy siblings, or a family member.
As estate planners, we cannot stress enough the importance of words and that they matter. A single word can derail your goals. A carefully drafted estate plan by a licensed attorney practicing estate planning is essential. Yes, you can go online through services such as Legal Zoom or Wills and Trusts, but if you want your plan to be solid, it is best to work with experienced estate planning attorneys who know all the federal estate tax issues and state-specific issues that are applicable, as well as who will listen closely to your goals and objectives to make sure your plan, your Will, is drafted for you.
If you don’t know how to start, have a financial advisor or tax accountant ask them for a recommendation. Consult or interview the attorney you are considering hiring, ask questions, and be sure that you feel comfortable.
As part of preparing for a consultation with an attorney, taking stock of your assets and liabilities must be paid at your passing. If you execute a will-based plan, you will need to name an executor. If you execute a trust-based estate plan, you will need a trustee. Also, you will also have to name persons to make medical and financial decisions for you, in the event you cannot.