Estate planning is critical for anyone with assets that need to be protected, and as an estate lawyer will share, the unexpected can happen, and it’s essential to plan for the future. But what is estate planning, exactly? Many imagine it only involves creating a last will and testament, but it’s much broader. Estate planning involves preparing to transfer a person’s wealth and assets after death. Assets, life insurance, pensions, real estate, debt, and personal belongings like cars and jewelry are all part of one’s estate. W.B. Moore Law shares five of the most common questions people have regarding estate planning:
Why is estate planning important?
Estate planning is crucial for several reasons:
- It ensures your assets are distributed according to your wishes after your death, offering peace of mind. Without a plan, the state decides who inherits your assets.
- It can minimize the taxes your estate will have to pay.
- It helps protect your beneficiaries, mainly if they are minors or incapable of managing assets.
When should I start estate planning?
The answer is now. Many people mistakenly think estate planning is only for older people or those with significant assets. However, life’s unpredictability doesn’t discriminate. Regardless of your age, health, or wealth, a basic estate plan is essential, including documents like a will, power of attorney, and a living will or health care proxy.
Who needs an estate planning lawyer?
While it’s possible to create a simple will or estate plan on your own, especially with today’s digital resources, it’s often advisable to consult with a lawyer. Estate laws vary significantly by state and can be complicated. An experienced lawyer can guide you through the process, ensuring all legal requirements are met, and your estate plan is comprehensive and accurate.
What should be included in an estate plan?
An estate plan should have a will/trust, durable power of attorney, beneficiary designations, a letter of intent, and healthcare power of attorney or a living will. Each of these documents serves a specific purpose and is vital in ensuring your estate is managed and disbursed according to your wishes. Consider including digital assets in your plan, such as social media accounts, digital photos, emails, and other files and personal data.
Can I change my estate plan?
Yes, estate plans can and should be updated as circumstances change. This includes changes in financial status, personal relationships (marriages, divorces, births, deaths), and tax laws. A good rule of thumb is to review your estate plan every few years or whenever a significant life event occurs.
Estate planning is daunting, especially when dealing with complex financial matters and contemplating mortality. However, remember that estate planning is a dynamic process designed to evolve with your life’s journey. It is a powerful tool, providing security and peace for you and your loved ones in the face of life’s uncertainties. Ultimately, estate planning is not just about the end of life—it’s about preserving your legacy, protecting your loved ones, and maintaining control over your life’s work. So, take that first step today because the best time to plan for the future is always now.