Estate planning is absolutely essential when you reach a certain age, but it’s never too early to start thinking about how to distribute your money and property when you’re gone.
You don’t have to be extremely wealthy to think about estate planning. In fact, if you leave your will without an estate plan, it can lead to a lot of confusion among your beneficiaries, both interpersonally and with regard to taxes.
In this post, we’re going to help you through this process by giving you 4 pro estate planning tips. Don’t let there be any confusion about your end of life wishes, make a clear estate plan and put your mind at ease.
1. Put a Team Together
Having a team of professionals to help guide you through this process is always a good idea. Find yourself a financial advisor, tax accountant, and an estate planning attorney (go here to read on estate planning attorney in AZ) that you trust to provide insight on the various aspects of estate planning.
Involving them will help you create a clear and custom plan that works for your situation. The main goal is to ensure that there’s as little confusion as possible, so each one of these professionals can help to make that happen.
2. Document Everything
The clearer you are about your wishes, the less chance the state will be forced to make any important decisions once you’re gone. Here are a few things that you should make sure to include/think about in your estate plan:
- Healthcare and financial power of attorney to make decisions if you’re physically or mentally unable.
- A living will, as well as your last will and testament.
- HIPAA release form, allowing named individuals to access your medical records.
Make sure all of this information is included in the written estate plan that you come up with alongside your team of professionals.
3. Guardianship and Trusts
If you’ve got dependents, you need to set up guardianship for them in the case of your untimely death. Get consent from the chosen guardian beforehand. A good tip is to avoid naming couples as guardians, in the event of divorce.
Though they can be the same person, a guardian is different from putting someone in charge of a trust. Make sure you’re clear about what to do with money left to minors.
4. Planning for Taxes
Your estate could be subject to state and federal taxes, which can make assets tricky to distribute after your death. These taxes are usually due within 9 months after your death and can jump to 40% if your estate is over $1 million, so if you leave an asset to someone, they either have to pay up or sell the asset to have the money to pay up.
This is yet another thing you should tackle with your team when crafting your estate plan. There are some things can do with your money to avoid these taxes, but figure out what you’re likely to have to pay and decide what the best course of action is.
Get Estate Planning Out Of the Way
No matter how old you are, it’s wise to take care of estate planning. You never know what could happen and if you’ve got wealth accumulated, you want to make sure it goes to the right people. An estate plan will ensure that happens, so start building your team and get started ASAP.
Did you enjoy this post? Come back again for more helpful finance and lifestyle tips.
