Estate planning is apparently something for the rich but it is equally essential for people who are not ultra-wealthy. Having everything related to the distribution of your assets planned and documented is a smart idea as it keeps your property and family financially secure. But this is something complex, which is the reason that you should avail the services of an experienced and specialized attorney for handling the process. Even though you may be supported by an expert, knowing the process well enough is a good idea so that you can plan your property in a better manner. Here are some questions that you would want to ask and facts you need to gather estate planning.
Q1: What is the objective of an estate planning?
Even though planning your assets is usually regarded as a provision of distributing your property in the event of your death, it goes much beyond. You may also want your assets to be taken care of if you become mentally incapacitated and an estate plan can look after that scenario too. Make sure that your attorney covers this aspect as a part of the plan because you may suffer mental disability at a very old age. Further, unfortunate events like accidents can be another reason that you may be incapable of looking after yourself and your assets. The objective of estate planning, therefore, is to plan your assets in the events of death and incapacity.
Q2: What are the taxes that can affect your estate’s value?
It is important that you know about the taxes that can affect your estate’s value because they can directly impact the inheritance that your beneficiaries will receive. Primarily, your property can be affected by four types of taxes, namely estate taxes, income taxes, gift taxes and generation skipping transfer taxes. A good plan has the objective to minimize these taxes so that your beneficiaries can get maximum value from the assets they inherit.
Q3: What are the essential documents for estate planning?
Documentation is an integral element of an estate plan and you cannot consider it complete without the right set of documents. The ones that are absolutely essential include Living Will, Last Will and Testament, Power of Attorney and Advance Health Care Directive. Besides these key documents, you may require some more depending on your circumstances and objectives. You can check this website to understand how a specialized attorney can help you with this aspect.
Q4: What are the options to pay the beneficiaries their inheritance?
An estate plan not only helps you to decide how your assets will be distributed after your death or incapacity, but also gives you several options to pay the beneficiaries their inheritance. You can get it paid as a lump sum in one go or have it disbursed in stages or phases. There is also the option of lifetime discretionary trusts. Further, the payment methods will differ in case of minor beneficiaries as compared to those in case of adult beneficiaries. You can even decide how they can use your property after inheritance.
Q5: What is a revocable living trust?
Another concept that you need to understand is that of a revocable living trust. It is a legal document which covers three aspects related to your property, when you are alive and well, in case of mental incapacitation and in the event of death. Having a revocable living trust as a part of the estate plan is recommended for avoiding probate and ensuring that the plan remains a private family matter. However, it may not be an apt option for everyone and it is best to consult an attorney to help you decide whether you need one or not.
Q6: Should you review your estate plan?
Having a plan is a smart move but you cannot just have one and forget it. It is so because there are several life-changing events that may require you to review it from time to time. For example, events like marriage, divorce, birth of children and grandchildren, death of a close one, moving to a new place and buying or selling a business may augur a tweak in the plan. Further, you may need to do it in case of changes in state or federal laws. So it is recommended that you should review and refresh your estate plan periodically.
Now that you know estate planning well enough, you will be in a better position to discuss specific needs and objectives with your attorney. Awareness always helps you manage your property better!
