Guest Post: Estate Planning: 5 Ways to Set Your Family Up for Success
Everyone has a limited time on this earth, so we should make the most of it. Preparing for when we depart is what every responsible adult should do as well. If you haven’t begun estate planning, now would be a great time. Here are a few ways to get started with estate planning today.
1. Writing a Will for the First Time
After someone dies, their will describes how to handle all their assets. Distributing the belongings of the recently-departs can be hectic when there’s no will. If your family opens any disputes, nothing would be there to help settle them. So, once you’re ready to start estate planning, write a will. You don’t have to hire anyone to write it unless you’d like to. But, a writer could help avoid any mistakes people commonly make while writing them.
2. Protect Your Loved Ones by Getting Life Insurance
Does your retirement account have enough to cover your loved one’s expenses forever? If it doesn’t, then we’d suggest talking about life insurance next time there’s a chance. Getting a policy would be an easy way to make sure they’re covered if anything ever happens. When you have coverage, it only pays out in the event of your death. So, unless that happens, it’s merely for peace of mind. Younger people tend to get better deals whenever signing up for policies, too. That’s why we’d say it’s a good idea to get coverage soon. The longer you wait, the more expensive it’ll be.
3. Hire a Qualified Executor to Carry Out the Will
An estate planning law firm in Los Angeles can help you find one. However, you should always hire an executor early in the planning process. It’s much easier to catch them up to speed if you haven’t gone through everything already. An executor handles your assets after death. By giving them access to everything, disputes aren’t a huge problem. They’ll ensure it’s distributed to people according to what’s in the will. As long as you’ve written one, there’s nothing to worry about. Your executor has a legal obligation to follow it by the letter.
4. Set Aside Enough to Cover Any Estate Taxes
Not everyone has to pay estate taxes, but many do. So, it’s worth checking to see whether it’ll be an issue in your situation. If there’s going to be a hefty tax, don’t leave without putting away enough for it. Otherwise, it might be an issue for anyone inheriting stuff from you. By working with an estate planner, your tax situation should be clear. They’ll let you know what to expect and how to prepare. Each state sets its own laws with regard to inheritance, too. So, inform your estate planner where your assets reside. That’s an important fact for them to consider whenever calculating potential liabilities. Don’t forget to look at federal taxes while you’re calculating everything. Once you’ve passed, a surprise tax bill would be a massive headache.
5. Consider Establishing a Trust to Benefit Your Children
Trusts are a special investment vehicle used to safeguard funds after someone’s death. By putting money into them, anything invested is safe until maturity. You have to set a date when money may be withdrawn from the trust while establishing it. After choosing a maturity date, nothing can come out of the account until then. Using trusts has grown in popularity among people with heirs. When they’ve invested money in them, it’s kept safe. As a result of their track record, the safety of using them seems mighty attractive. Talk to an estate planner about the potential benefits of establishing one for your kids. Most of the time, they’ll help you figure out how much to put in them without risking too much.
How to Approach Estate Planning
Working with an estate planner is always a smart idea. By asking for their help, you’ll have someone guiding you through everything. As soon as something seems confusing, just ask for clarification. Once they’ve cleared things up, you’ll understand why they’re worthwhile. Plus, it’s nice getting to see your family feel secure.
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