Top 7 Tips For Estate Planning
We work so hard, and spend so much time accumulating little baubles of wealth that it often seems we barely have the energy left or the hours in the day to properly enjoy them. Well at least when we do finally run out of time and energy forever, at least our loved ones will be able to enjoy them right? Well, maybe…
Because the truth is that unless we spend a bit more time and invest a bit more energy in estate planning, our relatives or estate administrator may be left with nothing other than a mess of paperwork and the horrors of probate after we shirk this mortal coil away. In this post, we will take a look at estate planning and provide our top 7 tips including online estate planning and making a living will.
The Importance of Estate Planning
Nobody likes thinking about death and especially not their own death (except maybe Gothy teenagers). But it is something that mature people need to do every now and then, so do stay with me. If you died today, what would happen to your family and your worldly goods? Have you left money aside to see your kids through college? If so, do they know how to access it? Moving on, does your next door neighbour want them to look after your cat or is there a risk it will be put into a shelter?!
The truth is that most of us have not adequately planned for our deaths and would leave our next of kin with a lot to unravel, unpack and unpick.
To die without making a will is to die intestate. Intestacy laws vary from state to state but as a general rule, a single ‘next of kin’ person is identified and they are left to deal with the entire estate but are also the sole beneficiary of the entire estate. Note that a legal next of kin is not always the person you would expect, trust, or want to inherit your worldly lot.
This is why we have prepared these 7 top tips.
1. Make A Will To Avoid Probate
It is of paramount importance that you make some kind of will. A will is simply a written and executed document that sets out your final wishes. Will’s are typically used to set out who inherits what after a person’s death including savings, stocks, property, jewellery, LP records and pets.
You can make a will by visiting a lawyer, or by using an online will maker.
2. Record Your Full Estate
When a person dies, they are no longer in much of a position to tell their executors that they bought shares in Apple back in 1984 that are now worth a few million. Therefore it is important that you set out and document everything you have. Make a list of all bank accounts you have, all stocks you hold, a list of properties and vehicles you own as well as the secret stashing place for that gold bullion you once dug up.
This one is especially pertinent when it comes to BitCoin and crypto-currencies – the internet abounds with stories of crypto millionaires dying without ever recording their passwords.
3. Prepare For Incapacitation With a Living Will
Estate Planning isn’t just about death. With more of us than ever loving longer than ever, we are headed for a global pandemic of degenerative illness like Alzheimers. Estate planning also allows us to set out what we want to happen if we are judged to have lost capacity.
This includes things like creating a living trust, identifying a relative to look after you and making sure monies are set aside to find your ongoing care.
4. Find The Right Lawyer Or Online Estate Planning Site
Not all lawyers were created equal. Some are great and others are, well the less said the better. Finding the right one for you needs can make all the difference between a comprehensive and legally sound bank of estate planning documents and leaving a contestation time bomb that your relatives will litigage over.
If you cannot afford a good lawyer, then why not check out online legal software? Estate planning can be done online perfectly adequately these days at a fraction of the cost of a lawyer.
5. Get Tax Advice
We all know the old adage about life’s two certainties being death and taxes but sadly, the taxes don’t even stop with death! Any assets we bequeath to friends or relatives will be subjected to state and maybe even federal taxes. However, there may be ways to offset and minimise these if you are proactive and take the relevant advice ahead of time.
6. Consider Setting Up A Trust
If you have young relatives, or simply financially irresponsible relatives, then you may not want to leave a huge lump sum of cash which they may waste. In cases like these, you can set up a trust for their benefit. Trusts can work in a variety of different ways monies can be held until a certain date, or then can be released periodically in the form of a monthly or annual stipend.
7. Keep Your Beneficiaries & Estate Administrator Up To Date
And finally, it is usually wise to make sure that any estate administrators or beneficiaries know what is coming. Whilst you may not wish to exclose full details, you should at least let the relevant people know that when the time comes, they will inherit either a little bit of something or a mountain of paperwork. After all, it’s just polite!
Estate planning and probate can be straightforward or complex – it all depends on whether you want to make a living will, have complex tax dilemmas or acrimous familial ties. Still, as long as you appoint an estate administrator and make a will then it’s a step in the right direction. Whether you can pay a lawyer or just use online estate planning facilities, doing something is better than doing nothing.