It’s something that everyone needs, but often gets overlooked. Estate planning makes some people downright uncomfortable. There’s no law that says you must have an estate plan—just laws that will determine how your property is distributed and who will raise your children if you don’t have a will. So, will the state decide who gets your assets?
If you don’t at least have a last will and testament, state statutes will decide who gets your assets after you pass away. Thats one of the biggest reasons planning is important, says WMUR 9 in a recent article “Money Matters: Estate planning,” if you want to be the one making those decisions.
An estate plan can be simple if you only own a few assets, or complicated if you have significant assets, more than one home or multiple investments. Some strategies are easier to implement, like a last will and testament. Others can be more complex, like trusts. Whatever your needs, an estate planning attorney will be able to give you the guidance that your unique situation requires. Your estate planning attorney may work with your financial advisor and accountant to be sure that your financial and legal plans work together to benefit you and your family.
The first step for any estate plan is to review your family finances, dynamics and assets.
- Who are your family members?
- How do you want to help them?
- What do they need?
- What is your tax picture like?
- How old are you, and how good is your health?
- Do you have minor children? If so, who will care for them?
These are just a few of the things an estate planning attorney will discuss with you. Once you are clear on your situation, you’ll discuss overall goals and objectives. The attorney will be able to outline your options, whether you are concerned with passing wealth to the next generation, avoiding family disputes, preparing for a disability or transferring ownership of a business.
A last will and testament will provide clear, legal direction as to how your assets should be distributed and who will care for your minor children.
A trust is used to address more complex planning concerns. A trust is a legal entity that holds assets to be used for the benefit of one or more individuals. It is overseen by a trustee or trustees, who can be individuals you name or professionals.
If you create trusts, it is important that assets be retitled so the trust owns the assets and not you personally. If the assets are not retitled, the trust will not achieve your goals.
Some property typically has its own beneficiary designations, like IRAs, retirement accounts and life insurance. These assets pass directly to heirs according to the designation, but only if you make the designations on the appropriate forms.
Once you’re done with your estate plan, make a note on your calendar. Estate plans and beneficiary designations need to be reviewed every three to five years. Lives change, laws change and your estate plan needs to keep pace.
Don’t be left asking yourself whether the state will decide who gets your assets. Take charge and work with an experienced estate planning attorney to make sure you are the one deciding who gets your assets and who will raise your children.
Reference: WMUR 9 (Aug. 1, 2019) “Money Matters: Estate planning”