Given the uncertainties of life, thinking of your family’s future as early as you can is extremely important. If you have lots of properties and other valuable assets, deciding who will inherit them after you’re gone is something that you should pay attention to. This is why it is important to prioritize estate planning.
Typically, planning one’s estate isn’t just for the rich or wealthy. You may not have a significant and pricey home, or expensive art pieces to pass on. However, you still have the right to prepare your estate plan with the assistance of an estate planning lawyer in Denver and other places around the world. With this kind of plan in place, you can ensure that settling the issue of your properties will not have a costly impact later on.
However, you should take note that estate planning is not something that is just done once. If you notice some changes in your circumstances, you should check and update your estate planning documents to make sure your wishes are being followed.
Continue reading this article to learn about estate planning and why now is an excellent time to review your estate plan.
Estate Planning: What You Should Know About It
Primarily, estate planning refers to a process of planning for the things that might happen after you depart from this world. This includes designating the persons who will inherit all your properties and other valuable assets. However, it’s important to note that estate planning isn’t limited to creating a will. It’s also about preparing for the worst possible scenarios, such as managing your affairs in the event you become sick, disabled, or injured.
To better understand what estate planning is all about, you should get familiar with the following terms:
- Power Of Attorney – It gives an individual or entity the authority to manage all your affairs in case you’re unable to do so.
- Will – It’s a legal document that provides details about how your properties will be distributed to your heirs, including the amounts.
- Trust – It’s an agreement whereby you entrust your property to another person for the benefit of your eventual beneficiary.
Now that you’re already aware of the aspects involved in estate planning, the next step is to tackle the reasons why you should consider having an estate plan as early as possible. These include:
- Protect Young Children – If you have young children in the family, you need to carry out estate planning to protect their financial future. By drafting a will, you can designate their shares in your estate and make sure they have something to inherit after your death.
- Avoid Family Trouble – When you die, you probably don’t want your properties to be the reason for family feuds. Having an estate plan ensures that your family will not think that they’ve been wronged. It can also keep things from getting messy as to who should inherit what, and so on.
- Avoid Probate – With an estate plan, your family can avoid the complicated process of probate. This is a court proceeding that requires payment of property taxes and other bills and distribution of what’s left from the estate. So, if you want to save your family a great deal of stress, plan your estate now.
- Determine Who Inherits Your Properties – Whether it’s the family home, stocks, real estate investments, and other possessions, you need to pass on these things to your heirs after your demise. But if you leave them as is without designating who should get what, it would create confusion for your whole family. That’s why you should prepare an estate plan to choose who should inherit specific portions of your assets.
Estate Planning: Reasons Why You Should Review Your Plan Now
As mentioned, having an estate plan in place can make a massive difference in the administration of your estate after your death. However, it doesn’t mean that your plan remains unchanged forever. As time passes by, your circumstances might change unexpectedly, and as such, you probably need to take a look and update your estate planning to ensure it’s in line with your requirements.
Below are the reasons why you should review your estate plan now:
You’ve Experienced Any Of The Four D’s
Indeed, life is full of surprises. Sometimes you’re up, and other times you’re down. Thus, if you’ve experienced any of the 4 D’s such as debt, divorce, disability, and death, it’s crucial to check your estate planning documents. Figure out how these life events can affect your family, specifically your heirs.
For instance, consider the changes in your circumstances in terms of who should be given financial powers of attorney to administer all your assets, and who you would want included in your trust or will. That way, you can have peace of mind knowing that your family’s financial future is guaranteed.
You’ve Reached An Important Milestone In Life
Reaching a milestone in life is one of the most appreciable moments you’ll ever experience. Whether you get married, start your own business, or have a child, these life events should be considered a reason to review your estate planning.
Of course, with these significant changes, you want to ensure that everything is running smoothly according to your plans. For example, if you’re having a baby, you would definitely want to secure their future by updating your estate planning documents.
Some Family Members Experience Hard Times
Aside from your life-changing events, some other circumstances can also impact your estate planning. For instance, if you have a sick family member or relative that needs financial assistance, you might want to review the beneficiaries of your bequests and include them in your estate plan. This would probably be the best time to help a family member by modifying your estate plan, and give your properties and assets according to your wishes.
There’s A Significant Change In Your Assets
You can’t guarantee that all the assets you’ve described in your estate planning documents would still be yours upon your death. Perhaps, while you’re still alive, you might decide to dispose of one of your properties to fund a particular undertaking.
And if that particular property is included in your will, you need to review your estate plan and make the necessary adjustments as required. This is to ensure that problems will not arise during the settlement of your estate after your death.
A Significant Beneficiary Or Executor Passes Away
Another instance that will warrant the review of your estate planning documents is when a beneficiary or executor passes away while you’re still alive. To elaborate, an executor refers to a person designated by the maker of the will to execute the instructions laid down in the said document.
Therefore, when your executor dies, it’s essential to get your estate plan reviewed so you can appoint a new one. Doing so can help make sure that your will at the time of your death is updated, and an active executor will be there to help settle your affairs.
There Are Changes To Law On Succession, Taxation Law, Or Family Law
The government is making some efforts to modify certain legislation and make it more applicable to actual situations. Therefore, if there are changes to taxation law, family law, or law on succession, it’s an indication that you have to take a look at your estate plan to ensure that it’s executed in accordance with the law.
Below are the laws that you need to review concerning your estate planning:
- Achieving A Better Life Experience Act – This law was passed in 2015. It provides that people with children with special needs under 25 years old can establish tax-free accounts to fund education, transportation, and housing expenses for their children. Thus, if you have a special child under the age of 25, and you haven’t changed your estate plan until now, then it’s time to look at your estate planning documents and modify them.
- Federal “Fiscal Cliff” Legislation – This law was passed in 2013 to reduce the number of families who will be affected by estate taxes. So, if you’ve made your estate planning documents prior to this year and you still haven’t checked up on them, a thorough review of your plan can be an excellent idea to minimize the estate taxes your executor or beneficiaries will have to pay.
As you can see, there are many circumstances that can affect the way you prepare your estate plan. To ensure that all your estate planning documents are in line with the laws and events that are happening to your life, talk to a dedicated estate planning attorney who can help you navigate all options available to you.
With the information presented above, it’s clear that estate planning can be a complicated process. After all, it involves all your assets and properties that serve as a future investment for your loved ones who will be left behind after your passing.
Thus, to make sure nothing in your estate plan is overlooked due to some important changes, keep the points mentioned here in mind and start reviewing your documents with the help of an estate planning lawyer.