According to a Gallup poll, only 44% of people have wills when they die. The other 46% die without any estate plan at all.
A will is probably the most common and most crucial estate planning tool you can have, but it is not the only option. Estate planning involves a lot of other things, too.
No matter how old you are, having an estate plan is essential. If you’ve been thinking about this lately but haven’t begun working on a plan, you should start now.
You can learn more about estate planning by reading this guide, as it will help you understand the basic steps and principles of an estate plan.
Estate Planning Is for All Ages
Many people have the misconception that estate planning is only for older people, like seniors, but this is not true. Estate planning is for people of all ages. Planning your estate is a vital task that you should do, no matter how old you are.
To begin working on your plan, you can contact an estate planning attorney. The attorney will ask you questions about your age, family, and assets. From there, the lawyer will use an estate planning checklist to guide you with your plan.
People in younger age brackets tend to have different needs than older people, and therefore, the plan your attorney suggests will be unique for you. If you’re on the younger side, the plan the attorney suggest might have the following goals:
- To create a plan for someone to care for your minor children
- To include financial means to care for your children
- To ensure that your kids receive your wealth
Plans for older people might be catered more towards ensuring that their loved ones receive their assets without paying taxes. Another goal of an estate plan for an older person might be to avoid probate court.
When you meet with an attorney to create your plan, they will explain the main tools used in estate planning. After that, the attorney will try to learn your unique needs to offer advice that helps you prepare the most effective plan possible.
Creating a Will and Last Testament Is a Good Place to Start
Most estate planning lawyers recommend creating a will and last testament as the beginning point of an estate plan. A will is a legal document anyone can make to state their wishes. Some wills are very detailed, while others have few details.
You can decide if you want to create a detailed will or a basic one, and your lawyer will assist with either. A basic will should contain the following things:
- The names of your beneficiaries
- How you want your assets divided
- Your burial or cremation wishes
A more detailed will might contain many other details, such as specific requests you have for your assets. It might include exclusions or age requirements for your beneficiaries.
You can include as many details as you would like or as few. However, you should have a lawyer create this document for you. When you hire a lawyer for this, you can be certain that the document will hold up in court when you pass away.
Forming a Trust Is a Wise Decision
While some people can survive with having a will only, others utilize more tools. A trust is another tool that many estate planning lawyers recommend, but there are different types of trusts.
A trust is an entity you create according to estate laws in your state. You place your assets into the trust while you are alive, and the trust owns the assets. Using a trust makes the transfer of assets easy when you die.
It allows a family to receive your assets without going to court, and it helps reduce arguments and confusion when a family settles a person’s estate. Your family will have fewer problems with your estate if you create a trust.
Your lawyer can help you understand the different types of trusts you can choose from. One of the most common types is a living trust, but there are also other types.
When you die with a will and a trust, the two documents work together to help your family divide your things. They will face fewer challenges if you have both documents.
Naming Power of Attorney Is Also Vital
An estate planning lawyer might also recommend naming powers of attorney (POA). A POA is a person you choose to make decisions for you when you cannot make decisions yourself.
You can name a person as your financial POA and one for medical POA. The financial POA could make your financial decisions for you, while the medical POA could make medical decisions for you.
Updating Your Estate Plan Is Essential
The final thing to understand about estate planning is that it takes more than one visit to a lawyer to complete it. In fact, you should make a habit of updating your estate plan regularly.
You can update your plan as often as you would like, but most lawyers recommend updating it every couple of years. If you have a change in your assets, you can contact your lawyer to make the necessary changes.
If you experience changes in your personal life, it might also be wise to update it. For example, suppose you get divorced. If this occurs, you might want to change your will to eliminate your ex-wife from being a beneficiary.
You can easily make changes by contacting your lawyer, and you should make sure you make the needed changes right away. You cannot predict when you will leave this world, and you’ll want to make sure your estate plan is up to date.
Learn More About Estate Plans
Estate planning is something many people procrastinate with, yet it is not something to ignore. It is an essential part of life that protects you, your things, and your loved ones.
Are you ready to learn more about legal matters? If so, check our website to learn more about estate plans and other legal issues.