Planning your estate gives you power over your life now and if you become incapacitated or die. You can rest easy knowing that your estate will be handled how you want it to be and that your children’s best interests will be looked after while you’re no longer not around. Not only does making an estate plan help you plan for incapacitation or death, but it can also help you save money on estate and gift taxes, avoid inheritance fights, and speed up the probate process. It also protects your assets and keeps your requests private.
If you are planning your estate or want to review a plan you already have, keep reading to get ideas for what to put on your list.
Understanding Estate Planning
Estate planning refers to arranging how assets will be handled during your lifetime and after your demise. Its essential elements include wills, trusts, powers of attorney, and healthcare proxies. When the moment comes to pass on your valuable goods, proactive and cautious preparation will make things easier for you and the people you choose.
Your estate comprises everything you own, such as bank accounts, homes, cars, coins, art, and record collections. To ensure you have a say in how your wealth is divided, estate planning is crucial. Doing some work now might seem unpleasant or challenging, but your family and friends will be very grateful and likely save a lot of money.
Steps for Creating an Estate Plan
This involves several critical steps to make the most of your estate plan, ensuring that your will is respected and your assets are protected. Here’s a streamlined approach to establishing your estate plan:
List Assets and Liabilities
This means compiling an asset inventory of your financial and physical possessions with the debts or obligations you may carry. First, list your assets: real estate, bank accounts, investments, retirement funds, vehicles, and personal belongings. Then, list your liabilities, such as mortgages, loans, credit card debts, and other sources of liability. It can only benefit your understanding of how your assets and liabilities are balanced if put toward estate planning because it can assist in computing your net worth and, therefore, guide decisions regarding how your estate will be shared with others once you are gone.
Establishing a Trust
You may want to create a trust and transfer some parts of your estate. The trustee of a trust may or may not be you or a third party other than you. Depending upon what kind of trust it is, sometimes it is someone else, while at other times it will be you. There are several advantages of using a trust, including tax breaks, the protection of assets, the right to maintain your privacy and ease with the transfer of property to beneficiaries because such property does not necessarily have to go through probate. If such assets went into probate, it would take several months or even years before your beneficiaries could access your assets after death.
This is because probate court is different for each person. Also, probate is a public process, so your partner or your children may not get the privacy they want during this time. How fast a will goes through probate can also depend on where you live and how your family is set up.
Living or testamentary trusts are both possible. You can avoid probate if you set up a living trust while still alive. On the other hand, a testamentary trust is set up by your will and starts to work after you die. This is one of the negative aspects of testamentary trusts. They become public records after death, while living trusts do not. It’s possible that these types of trusts won’t protect your privacy as a living trust does. Living trusts can be changed or revoked. With a revocable trust, you can change the rules of the trust, even end it. But once an irrevocable trust is set up, it can’t be changed or ended.
Lastly, a trust needs to be supported, which means that your assets need to be in the trust for it to work correctly and avoid probate.
Write a Will
A will is integral to estate planning, so you should put it on your list. You can list your valuables and name the people you want to receive your money when you die. It is possible to name a guardian (someone you trust) and give instructions on how to raise your children through your will if you have any. Also, it is helpful to choose an agent who will handle your estate after you die. When you die, your attorney sends your will to the family court for use. Remember that while making a will is essential to estate planning, it doesn’t avoid inheritance or keep your goals secret as a living trust does.
Get Ready for Possible Incapacitation
You should be prepared for the real possibility that you’ll never make decisions about your health and finances again, perhaps because of severe illness or injury. Preparation is critical to ensure that your wishes are considered and that your affairs run precisely how you want them to.
As you prepare, you should consider putting in place a durable power of attorney that names a person with the authority to handle your financial matters should you be unable to handle them yourself. Prepare another document, a health proxy, which will name an individual who will make medical decisions if you cannot communicate with a doctor. It’s recommended you should discuss this with family members and the agents you named so they are aware of what you want and ensure they respect those choices. The estate planning documents should be reviewed and updated regularly, especially after significant life events, to remain valid and applicable to their current status.
Please remember that the above POA, health care proxy, and also HIPAA authorization papers are necessary for more than just you and your partner to create. These documents are also essential for your grown children to think about making. If your children haven’t had these documents created, you might be unable to help them in an unexpected medical situation.
Pick Beneficiaries
List the people who should receive your property when you die. These could be people who count on you, other loved ones, or even groups like charities.
Check the Designation for the Transfer on Death Account (TOD)
You must name heirs when you set up a savings account, life insurance policy, CD account, or anything else. Check the accounts and make sure that the “transfer on death” label includes the people you want to receive the money when you die.
Establish an Executor Reference List
Make a list of all your agent needs to do to find your assets and all the papers they need to do their job, such as the credentials for your digital assets.
Notarize and Sign Estate Planning Paperwork
Most papers used for estate planning need to be signed, witnessed, and notarized. If you don’t sign your estate papers, they might not be legal. Some state rules say that a person who makes a will must sign it before two witnesses for it to be legal. This is called the “traditional statute of wills.” This signing event gives some confidence that the “will” reflects the testator’s wishes to provide property to their loved ones.
Regularly Examine Your Estate Plan
Finally, don’t forget to cross-check your will often and make necessary changes. It would help if you did this once a year or whenever something big happens in your life, like the birth of a child, the death of a receiver, or a change in your marital situation (marriage, separation, etc.).
How Mucci Law Can Help You
Estate planning for 2025 needs updated knowledge of laws and strategies. Mucci Law details services regarding estate planning, ensuring that all assets are protected and conveyed clearly according to one’s wishes. Our experienced attorneys can help you along every step of the process – from writing a will to setting up trusts or following tax regulations. Start your estate planning with confidence. Contact Mucci Law today for expert assistance!
FAQs
How soon should I start estate planning for 2025?
Begin estate planning today to safeguard your assets and express your wishes.
What are the most essential documents that would be part of my estate plan?
Typical papers include wills, trusts, powers of attorney, and healthcare proxies.
Do I need an attorney for the estate plan?
Although one may create an estate plan without an attorney, guidance from the latter prevents those missteps and helps ensure compliance with the law.
Abhishek Shah
