Tips: Estate Planning


January 14, 2018

At the beginning of each year, we reflect upon everything that has changed in the last 12 months and plan ahead for what the New Year will bring. It’s also a time many of us make the resolution to be more organized or to stop procrastinating.

One task that many families put off far too long is estate planning. If you are taking steps now to get your finances and taxes and budgets settled for the new year, stay in that paperwork-and-planning mind frame and make sure that your loved ones have appropriate and up-to-date plans in place for their future and their estate.

Estate planning is essentially creating the legal documents that will direct loved ones in how to deal with end-of-life issues and in the division of property following a person’s death. Not only does this make an estate holder’s wishes known and legally binding, it allows them to take advantage of exemptions and provisions that can make a big difference when it comes to the disbursement of the estate.

And estate planning isn’t just for the wealthy. Anyone with real estate, bank accounts, vehicles, jewelry or other valuables can benefit from assessing and planning what will happen to their property, heirlooms and even pets after their death.

Here are a few basic steps* to help you begin thinking about establishing or updating an estate plan:

  • Update your will – Circumstances change, finances change, people change. Update the estate holder’s will now and reassess every year.
  • Plan for disability – It’s hard to think about, but the estate holder may have greater care and medical needs in the future. Set aside money to cover those expenses.
  • Make gifts to reduce estate taxes – Consult the legal guidelines for the estate holder’s living situation and maximize giving to minimize taxes.
  • Consider using a living trust – A living trust is in some ways similar to a will, but it allows the estate holder to control the assets while living and then more easily transfer assets to the beneficiaries after the estate holder’s death. A living trust may help save money and can help families avoid probate.
  • Choose an impartial executor – An estate holder’s closest family may be too emotionally involved to deal with the estate or to be unbiased and to-the-letter about its execution. Find someone trustworthy who can execute the estate holder’s wishes to the letter, without undue influence from beneficiaries.
  • Take advantage of government exemptions and provisions – There are many provisions for couples, singles, programs and the type of property and issues addressed in the estate plan. Have a legal professional guide the estate planning process to minimize the potential tax burden.
  • Use a legal professional – Estate law can be complicated. And messy. And personal. A legal professional is the best bet for achieving the intended goals of the estate plan. If someone dies or is incapacitated without a will or estate plan, a judge will make appoint a party to make decisions for the estate holder. Make sure end of life wishes and plans for an estate are spelled out, valid and legally binding.

No one likes to think about making these decisions, but the time will come when a family has to face the more practical and taxable aspects of a loved one’s death. Work with the estate holder to make sure their plan is in place for end-of-life and beyond.

*This article should not be considered legal advice. Consult your attorney and financial planner before making important decisions about estate planning.