6 Questions to Ask Yourself About Estate Planning

Filed under: Estate Planning

In the estate planning world, we often see two types of people: Those who just never get around to making a plan, and those who know they need a plan but find themselves too overwhelmed with details. Estate planning doesn’t have to be that complicated. Ask yourself the following six questions, and you will have a good idea of the steps you need to take.

1. Do you have minor children? Or an adult child who is disabled?If so, you need to write a will and name a guardian, just in case you pass away before your child is able to care for himself. This person will be in charge of your child’s emotional, physical, and financial well-being, so choose carefully. If you don’t appoint someone yourself, the courts will select a guardian in the event that something happens to you.

2. Do you need to establish a trust? If you own real property and/or have over $150,000 in personal property, cash and investments you probably do need to establish a trust. This will help you pass real property and other assets directly to your heirs without subjecting them to the probate court system. There are also many tax issues to consider, and an estate planning attorney can help you devise a strategy to pass assets to your heirs while avoiding as much taxation as possible.

3. Have you named beneficiaries on all of your accounts? One of the easiest ways to bypass the probate process is to name beneficiaries on retirement accounts, bank accounts, and so on. But remember to update these designations on a regular basis. Occasionally we see someone designate a beneficiary on an account, fail to update it, and twenty years later they die and the account is passed on to someone who has been dead for years, or your estate ends up as the beneficiary causing a probate! This can become a legal mess. Make sure your beneficiary designations always reflect your wishes at the moment, and seek tax advice relative to retirement accounts.

4. Do you want to make any specific bequests? If you want to pass on your stamp collection, priceless paintings, or jewelry to a particular person, you need to draft a will and/or trust. Otherwise your possessions will be distributed according to state laws.

5. Do you want to leave a legacy to charity? A trust (charitable or otherwise) will do the job, and ensure that any assets placed in the trust will bypass probate and be given to the appropriate charity.

6. Do you own real estate? People sometimes make the mistake of adding an adult child onto the property’s deed, thinking this will help them avoid the probate process. In reality, joint ownership can create all sorts of legal issues, problems with dividing the estate, and even tax implications. It’s better to set up a living trust to transfer real property.

If you need help drafting a will, setting up a trust, or anything else, give us a call. An experienced estate planning attorney can help you decide which steps you need to take, and simplify the process for you.

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