Your estate plan is a comprehensive set of instructions about what you want to do with your assets when you pass away. The plan is subject to compliance with applicable laws, so you must ensure that yours is fully enforceable so that your loved ones can count on it when they need it.
There are several missteps that you can make when you are getting this together. Arm yourself with information to avoid these mistakes. Your estate planning attorney can help to ensure that you have it all in order.
Your life insurance policy
You know that you need a life insurance policy, but you might not realize that you may need a life insurance trust. The issue that you face without the trust is that your family members might be liable for paying taxes on the proceeds. Another benefit to this is that they won’t have to wait several months for the money that they need sooner.
Gifts from your estate
You can reduce the size of your estate by giving gifts to people and entities before you pass away. The federal government sets limits to these gifts. This is currently set at $14,000 per spouse, so a couple could give $28,000 total to the same party if they each give a gift. It is possible to give the full limit to more than one party.
Planning for the unexpected
Some people don’t think that they will ever become incapacitated, but planning for that possibility can help you to ensure your estate plan is comprehensive. You need to have a medical plan in the form of a living will. You should also give someone trusted power of attorney. There are two areas in which you can name someone – finances and health care. The people you choose should be able to make decisions based on your best interests and in the same manner that you’d make them.
Dealing with life’s changes
Circumstances in your life are likely going to change over time. When you have significant changes, such as your children becoming adults, deaths in the family, you getting married or divorced, the acquisition or removal of assets, or adding to your family, you need to review the estate plan to ensure that it still reflects your wishes.
Some people have special circumstances to plan for. Be sure to address these if you have any so that you and your loved ones can rest assured that everything is in place.