As anyone familiar with the old adage well knows, life throws us curveballs that we can’t anticipate or predict. While thinking about our final days isn’t a subject we don’t often take time to think about, it is something that we have to plan for. Life is uncertain. Having an estate plan isn’t only for the wealthy or elderly — everyone should have one.
What is estate planning?
Estate planning is commonly thought of as a final will, but there’s actually a lot more to it than that. Your estate plan can also include a trust agreement for your assets, as well as financial, tax, business, and medical plans in the event that you become unable to make those decisions yourself or pass away.
Why do I need an estate plan?
There are many people who don’t see the necessity of an estate plan and put it off or refuse to make one altogether. Ultimately, when something happens, this can be a major mistake. If you become unable to make your own decisions, a judge may appoint someone to handle your personal care or assets. If there’s disagreement about how those decisions are made, this process can become a lengthy and expensive one for everyone involved. Worse, if you pass away without an estate plan, your assets will be used first to repay creditors and then your relatives, even if they may not be your first choice of beneficiaries. If you don’t have living family members, the state may even claim your assets.
Even if you don’t own a lot of property or investments, you should ask yourself, “is it important what happens to me in a medical emergency or what becomes of my possessions and accounts in the event of my death?” This lies outside your control if you fail to make an estate plan.
What makes up my estate?
Your estate includes all of your assets including debts. Included in this are your:
Your estate will be valued as the “fair market value” of your properties after subtracting any remaining debts, which includes credit cards, loans, mortgages, liens, etc. It is important to plan around these debts because they will affect the ultimate worth of your estate after your death. In 2013, estates under $5.25 million are exempt from the taxation. Amounts above that are taxed up to a top rate of 40%, again something to keep in mind when planning your estate.
How can an attorney help me with estate planning?
A lot of questions directed toward The Heckele Law Firm have to do with strategies for writing a will, assigning a health-care proxy (a living will), and assignment of a power of attorney. These documents assure that your family and financial goals will be met after you pass away or in the event that you become incapacitated or unable to make financial and healthcare decisions for yourself.
An attorney can help you strategically plan for the distribution of your assets, name a responsible party in the event you become unable to make legal decisions and will help you make a plan to execute your last wishes.
When should I update my estate plan?
You should occasionally review your estate plan or whenever a major life event occurs. Ultimately, the estate planning process is one that is subject to change and may evolve. It may be important to see your attorney again as estate law changes, your assets change, or even the important people in your life change.
This post is a general review of the factors involved in estate planning and should not be relied upon as legal, tax, or financial advice. If you have questions about making your own estate plan, consider talking to the attorneys at The Heckele Law Firm, P.L.L.C. Our experienced, knowledgeable group of legal professionals can guide you through the estate planning process as it pertains to your own personal situation.
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