Many people who have small and medium-sized estates are often lax in their estate planning strategies. While those in smaller estates do not live under the same threat of massive estate and gift tax concerns that those with large estates deal with, proper estate planning not only can save an estate a substantial amount of money but also can provide some stability that eliminates potential conflicts upon death.
When developing an estate plan, planners should have a list of goals to accomplish in their estate plan in mind, including: probate streamlining or avoiding; writing a clear will or living trust; preparing powers of attorney; and planning life gifts.
Primary Goal of Estate Planning
A primary goal of estate planning is to avoid probate. The probate process is time-consuming and expensive, and it should be avoided if possible. Fortunately, over the past two decades, states have moved to either streamline or eliminate altogether the probate process for smaller estates. The monetary cutoffs for probate avoidance vary, but taking steps in your estate plan to avoid potential probate should be taken even if you think probate will not likely affect your estate.
Another goal in estate planning is to have some sort of certainty about what is going to happen with your assets when you pass away. Two common mechanisms to accomplish this goal are through a will or a living trust. Wills and living trusts work similarly to provide security about asset succession, but there are some nuanced differences between the two of them. The best choice between a will and living trust is often your particular situation and is factually dependent.
A third goal in estate planning is to keep beneficiary information updated. The most common payoff to a beneficiary is through life insurance but many other accounts can be paid out to beneficiaries. It is imperative to keep this information up to date to make sure that the right person receives these assets.
Planning Ahead To Have Certainty
Another common goal in estate planning is making sure that your wishes are followed if something happens and you are incapacitated. A good way to accomplish that is through medical and health care powers of attorney. These documents allow a trusted person in your life to make decisions for you financially and medically if you are unable to make them yourself. Another option is a living will where you lay out your desires for medical care in regards to life support.
A final common goal in estate planning is to decide who gets what gifts throughout the remainder of your life. Depending on the size of your estate, you may want to start making yearly gifts in order to reduce the amount of your taxable estate. By making these gifts, you are able to reduce the eventual estate tax bill that your heirs will face.
Some good goals in estate planning are deciding who gets what, when and what you want done when you become incapacitated and who you want to help make healthcare and financial decisions for you during that time. If you can get those two things taken care of, you are on your way to having a solid estate plan
For more information about the Stevenson Law Office give them a call at 818-784-5405 today!
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For more information about the Stevenson Law Office give them a call at 818-784-5405 today!