Even if you believe that you do not have the assets to justify creating a final will and testament, establishing an estate plan can save you a lot of trouble in the long run. Not only will it allow you to make informed decisions concerning your assets, but it will allow you to avoid potential problems down the line.
To avoid hassles that may occur after your death, create an estate plan with the following information in mind:
Plan for unexpected accidents, including disabilities. Over time, accidents, illnesses, and injuries may alter your finances, or render you unable to make important decisions. To plan for the unexpected, you can designate a power of attorney or create a living trust that will allow you to make an informed decision about handling finances, making healthcare decisions, or raising children if you become unable to do so.
Periodically provide updates. Changes may take place to alter family structure, or your assets may change over time. To ensure that the assets you leave behind are given to those you intend, it is important to make changes to your will shortly after important events take place.
Create taxable gifts. To avoid unnecessary fees or a lowered asset worth, gifts of up to $14,000 a year per spouse to individuals, groups, and businesses may be excluded from estate taxes.
On the other hand, while it may seem appropriate to leave your home to a family member or child, doing so as a gift may place a heavy financial burden on the beneficiary, as they will be required to pay taxes based on the value of your home. In this situation, it is better to pass on a home (or its value) as a form of inheritance.
Choose the right person to handle your estate. Although it may seem natural to name a spouse or child as the executor of your estate, in some cases, it may be better to name an executor that is not personally invested in your financial matters, to avoid potential conflicts or fraud.
Likewise, it is important to discuss your estate plans with any family members involved, to ensure that they understand why certain decisions are made. This will help to prevent conflicts later.
Create an insurance trust. Life insurance policies are subject to heavy estate taxes. To ensure that the proceeds of an insurance policy go to the intended beneficiaries, set up a life insurance trust to act as the owner of the policies, to avoid tax burdens.
Establish a detailed distribution of tangible property. While distribution of financial assets is important, in some cases, it may be beneficial to provide detailed instructions regarding tangible objects. Instead of a generic clause that instructs beneficiaries to split items as agreed upon, create a detailed list of items to avoid potential conflicts or court cases.
Media Estate Planning Lawyers at Eckell Sparks Help Clients Avoid Common Estate Planning Mistakes
To avoid potential conflicts, it is important to meet with a qualified estate planner who will ensure that your will is specific and efficient. If you or someone you know is contemplating an estate plan, do not hesitate to meet with an experienced Media estate planning lawyer at Eckell, Sparks, Levy, Auerbach, Monte, Sloane, Matthews & Auslander, P.C. With offices in Media and West Chester, Pennsylvania, we are easily accessible to clients throughout the southeast region. Contact us online or call 610-565-3701 to schedule a free consultation today.