When should estate planning begin? It is never too early to start planning for the future. Also, if the person is still competent, it is not too late to create an estate plan. Anyone can, and should, create an estate plan to make sure that their assets are managed properly and that any minor children are placed into the care of the person they designate and not someone determined by the courts.
Many financial advisors recommend starting an Estate Plan the moment a person becomes a legal adult and updating it every three to five years thereafter.
As soon as one owns property and has started accumulating greater financial assets and even have children, they should take estate planning much more seriously. For many people, this will happen in their thirties or forties.
Why is an Estate Plan Is Important:to ensure one’s assets go to the right beneficiaries, plan for one’s healthcare at the end of their life, plan for the future of one’s financial investments and accounts, arrange trusts, if applicable or necessary, designate an executor or Personal Representative, arrange guardianship for minor children, if applicable as well as prepare for the future of their business and protect assets, among others.
Five key factors to consider in an estate plan includeBeneficiary Designations. The first and easiest step to planning an estate is establishing beneficiaries of private funds, accounts, or policies, like life insurance policies, 401k plans, IRAs, and pensions; Wills, Transfer of Power, possible Trusts, and Securing Documents.
Seven steps to basic estate planning are: inventory one’s assets; account for their family’s needs; establish appropriate directives; review designated beneficiaries; note one’s state’s estate as well as Federal tax laws; weigh the value of professional assistance, and plan to periodically reassess.
After someone dies, someone (called the deceased person’s “executor” or “administrator” or “Personal Representative”) must deal with their money and property (the deceased person’s estate). They need to pay the deceased person’s taxes and debts and distribute the deceased party’s money and property to the people entitled to it.
The biggest reason an estate plan is NOT done is-people just have not gotten around to it, according to 40% of survey respondents in numerous publications. Meanwhile, 33% said they do not have enough assets to pass on to their loved ones, while 13% said the estate-planning process is too costly and 12% said they do not know how to get a Last Will & Testament.
Estate Planning is not just the transfer of wealth or distribution of assets after death. Estate Planning also includes planning for oneself in the event of incapacity. Incapacity, whether physical or mental, is increasingly a concern as humans are living longer.
Estate planning has two general objectives: to ensure that the assets are transferred according to the owner’s wishes and to minimize state and Federal taxes.
Some of the Common Estate Planning Mistakes include, but are not limited to, failing to plan, not discussing with family and friends, naming just one Beneficiary, forgetting about Power of Attorney or Healthcare Representatives/Agents, forgetting about final arrangements, forgetting about your digital assets, and forgetting about charities that are important to you, among some others.
As a rule, a person’s debts do not vanish or expire when they die. Those debts are owed by and paid from the deceased person’s estate. By law, family members do not usually have to pay the debts of a deceased relative from their own money. If there is not enough money in the estate to cover the debt, it usually goes unpaid.
While a Last Will & Testament is a legal document, an estate plan is a collection of legal documents. More specifically, they often include a Last Will, trusts, an advance directive (i.e., Living Will) and distinct types of powers of attorney-both medical and financial. An estate plan can manage other estate planning matters that cannot be covered in a Last Will as well.
Estate planning ensures that all of a person’s assets, physical, financial, and online, are inherited by or distributed to the people to whom they wish after their death. The state law might not consider one’s personal relationships or preferences while distributing assets if the said person dies intestate (i.e., without a Last Will) or other viable estate plan mechanism. If you have any additional Questions regarding the foregoing or have any legal issue or concern, please contact the law firm of CASERTA & SPIRITI in Miami Lakes, Florida.