Estate planning is essential for anyone wanting to protect loved ones, not just senior citizens or the wealthy. Without a plan, the courts decide the beneficiaries – not you. Assets do not automatically transfer to a spouse or a child after death. Without a complete plan, the process can be complicated, leading to unnecessary financial strain and significant delays for your family.
Now is the time to plan for your loved ones. Life-altering changes happen in the blink of an eye, but preparing ahead protects your plans and wishes.
When Should You Get an Estate Plan?
Consider creating or updating your estate plan when life-changing events occur, such as:
- Marriage or divorce
- The birth of a child or grandchild
- Retirement
- Your children celebrate milestone birthdays
- Acquisition of new assets (Inheritance, selling a business, and purchasing a home.)
What is Included in an Estate Plan?
A complete estate plan is more than a will or asset distribution. It also manages critical issues including disability, illness, or incapacity. Estate plans should not be a “one size fits all”. The complexity of the estate plan lies solely with you and how you wish to distribute assets to heirs or beneficiaries. Potential considerations for your estate plan include:
- A Will
- Durable and medical power of attorney
- Advanced directives
- Guardianship designations
- Additional legal documents, such as trusts
The Core of Your Estate Plan: The Will
A will is the foundation of any estate plan. It outlines how property and assets are distributed. It is crucial that any will aligns with any previous beneficiary designations, including retirement accounts. In other words, the beneficiary named on the retirement account should match the bequest in a will.
Consider naming secondary beneficiaries as well. If a primary beneficiary, such as your spouse, predeceases you, the will should identify the next designated beneficiary, such as your children.
Durable Power of Attorney
A durable power of attorney grants a designated individual the authority to make financial decisions on your behalf in the event you become incapacitated. The power of attorney can include managing your finances, paying bills, or maintaining other assets. It ensures you identify the individual you trust if you can no longer manage your affairs.
Medical Power of Attorney and Advanced Directives
Like a durable power of attorney, a medical power of attorney grants a trusted individual with the authority to make healthcare decisions in cases of illness, injury, or cognitive decline. A medical power of attorney should align with advance directives, preferences for medical treatments, life support, organ donation, and end-of-life care.
Including a medical power of attorney ensures your healthcare decisions are respected and spares your family from making difficult choices without clear guidance from you.
Guardianship for Minor Children
If you have children under 18, an estate plan should designate a guardian to care for any child under 18 years of age in the event of your death. Absent a designated guardian, the courts decide custody which often results in lengthy and extensive legal battles. Naming a guardian ensures a trusted individual will care for your children.
Trusts: Managing Your Assets
Trusts are powerful tools that manage the distribution of assets, reduce taxes, and provide for beneficiaries over time. A revocable living trust allows an individual to retain control of assets while alive, but the assets then pass outside of probate after death. This process does not require probate or court intervention thereby simplifying the distribution process. Irrevocable trusts remove assets from the estate upon creation, reduce estate taxes, and provide protection from creditors.
Irrevocable Life Insurance Trust (ILIT)
An Irrevocable Life Insurance Trust (ILIT) holds life insurance policies outside of the taxable estate. ILITs minimize estate taxes and ensure beneficiaries are provided for after death.
Why Estate Planning Is Important for Everyone
Estate planning is not just for the wealthy or elderly; it is vital for everyone. Whether you have a small home, a business, or a growing family, an estate plan protects assets and care of loved ones. Without a plan, loved ones and beneficiaries often face delays, legal complications, unnecessary taxes, and added expenses.
Estate planning also brings peace of mind. It ensures assets are passed to the right people, minimizes the impact of taxes, and prevents family disputes. Without an estate plan, the court—not you—will determine how your assets are distributed.
Estate planning should not be overwhelming. At ROSENBLATT LAW FIRM, our experienced team of estate planning attorneys simplify the process. We break down legal complexities and guide you step by step to ensure your plan is clear, comprehensive, and legally sound. Whether you need a will, a trust, or designation of guardians, we are here to help.
Schedule a FREE consultation with ROSENBLATT LAW FIRM today to secure your legacy. Estate planning is one of the most important steps you can take to ensure your family is protected and your wishes are honored. Do not wait—start your estate plan today.
