What is Estate Planning?
It’s wise for everyone to start the estate planning process as early as possible. Let's take a look at what an estate plan can do for you, what might go into it, and what could happen if you don't have one.
The primary goal of estate planning is to help protect, preserve, and manage your estate at your death or during incapacity. Some people see no need for estate planning until they reach a certain age. Others believe that it’s only for the wealthy. But in truth, it’s wise for everyone to start the estate planning process as early as possible.
Estate planning is much more than the act of writing a will. A will is one part of the planning process, but a comprehensive plan requires other documents to address your estate planning needs.
What might go into an estate plan?
An estate plan is a group of legal documents that specify how you would like to have your assets distributed, making it easier for your loved ones to handle your affairs when you are gone. Part of the planning should include documentation of your wishes for future needs in case you ever become unable to care for yourself. Think about estate planning as a plan that covers financial issues, tax planning, and medical instructions and can even include succession planning for a business.
How can an estate plan help while I’m alive?
Whether you have relatively few assets or a large estate, you will want to designate someone you trust to manage your assets and make health care and personal care decisions for you if you become unable to do so for yourself. Periodic updates are recommended since people close to you may change, your assets may be different, and laws may change. It may be necessary to make amendments or adjust your estate plan to reflect changes in your life.
At a minimum, you will want to decide who will receive your assets after your death and who you choose to manage your estate and handle the distribution of your assets. If your estate is large, you may also want to seek advice for preserving assets for your beneficiaries. This might include tax planning.
What can happen if you don’t have an estate plan?
Most are surprised to learn that if you don’t have an estate plan, a judge will have to appoint someone to handle your assets and personal care. In accordance with state law, your assets will be distributed to your heirs through what is known as intestate succession. Your assets are not automatically transferred to the state if you die without a will.
Another reason to have a clear estate plan is to protect and provide for loved ones who may not be related to you. When a loved one dies, the heirs might be unaware of accounts or assets unless they are clearly identified in the will or trust. Where there are no instructions, and if no one claims the property, it goes to the state. In some cases, the distant relatives of your spouse could have a claim to your assets. Having a valid estate plan gives you control over who will inherit your assets after your death.
What can an estate plan help you accomplish?
An estate plan can help you meet certain objectives like the following:
- Ensure that your assets are transferred to the people you choose, not those the state chooses
- Identify who you choose to care for your minor children
- Reduce potential family conflicts over your assets
- Minimize estate taxes and other transfer taxes
- Avoid the costs, publicity, and delays of the court’s administration of the estate
- Provide your wishes so that they are carried out if you become incapacitated
Estate planning is for everyone, regardless of how much you earn or the assets you have accumulated. Start your estate plan today. If you are an MSA member, you have access to hundreds of smart, guided, state-specific forms and documents for both personal and business use through the Resources section of your MSA Digital Platform.*
For further education regarding the financial side of estate planning, talk to a Money Coach. With your Money Coach, you can learn more about topics like beneficiary designations and how to communicate with your heirs, establishing advance health care directives, and tax considerations. Call 888-724-2326 today to get started.
* You should consult an attorney in your state for serious legal matters. Legal Forms, provided by My Secure Advantage (MSA), is not a substitute for the advice of an attorney. MSA and the Legal Forms feature do not provide legal advice.
This content is for informational purposes only and does not guarantee eligibility for the program or its services. Information provided in this article is for informational purposes only and is not intended to offer specific personalized investment, financial planning, tax, legal, or accounting advice. We recommend that you consult an attorney, tax advisor, or accountant regarding your unique circumstances.
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