Estate planning requires attention to detail.
If you are an American adult, you should have an estate plan.
This planning is not reserved for those who exceed the 2021 federal estate tax exemption of $11.7 million per person.
Effective estate plans are essential to protecting you, your assets, and your loved ones.
Poor estate planning causes more harm than good.
According to a recent Tickertape article titled “5 Estate Planning Tips That Aren’t Just for the Wealthy,” you can take action to create an effective estate plan.
What actions should you take?
Create a Will.
With a last will and testament, you can direct the disbursement of your assets.
It is also important when you have minor children.
After all, who would rear them to adulthood, if orphaned, let alone manage their inheritance?
Because probate laws govern the creation and execution of your last will and testament, you should work with an experienced estate planning attorney.
Name Your Beneficiaries.
Certain assets like retirement funds and life insurance polices are passed via beneficiary designations.
If your life circumstances change, you should review and update any beneficiary designations.
By failing to do so, you could leave these assets to an ex-spouse or disinherit your loved ones.
You should also review your last will and testament to ensure the elements of your estate plan align with your asset titles and beneficiary designations.
Ask Your Attorney About a Trust.
When funded, a revocable living trust can simplify the passing of your assets to your heirs.
Trusts serve a variety of purposes.
Discuss your needs with an experienced estate planning attorney to create a trust to meet your specific needs.
Power of Attorney.
Powers of attorney are important when it comes to incapacity planning.
If you become incapacitated, you cannot make legal decisions.
You should create powers of attorney for financial and for health care matters so a trusted agent will have the authority to manage your money, pay bills, and make medical decisions.
Think About Giving Now.
You can gift assets to your loved ones while you are still alive and decrease your taxable estate.
It is possible to give up to $15,000 with “warm hands” to each recipient annually without owing a gift tax.
If you are married, you and your spouse can each give $30,000 per donee.
By choosing to gift to charity, you may be eligible for tax deductions while you are still alive.
Following these tips will lead to effective estate planning for you and your loved ones.
Your experienced estate planning attorney can help you evaluate all of your options.
Reference: Tickertape (June 25, 2021) “5 Estate Planning Tips That Aren’t Just for the Wealthy”