Do not underestimate the importance of estate planning.
If you are alive, you will die eventually.
You may even become incapacitated along the way, whether for the short-term or the long-term.
These are cold, hard facts to face.
You need to prepare for these while you are still alive and well.
According to a recent KTUU article “Estate planning dos and don’ts,” failing to do so puts you and your loved ones at risk.
How do you start?
If dealing directly with issues of your own morbidity and mortality is a little too much too soon, then begin by making a list of your assets to break inertia.
After all, fundamental to estate planning is the distribution of your assets.
Before you plan how to transfer them, you will need to know what you have to transfer.
After listing what you have, record how each asset is titled.
Are they owned jointly with a spouse?
Are they set up to Transfer on Death or Pay on Death?
Are they jointly owned with one of your children?
Does a trust own the asset?
Each of these titling arrangements works differently than if you own the asset alone in your own name.
Next, move forward and make your estate plan.
By doing so, you will be taking more action than about half of American adults.
What if you die without an estate plan?
You have forfeited your right to give direction regarding your asset distributions.
Your assets will instead by divided according to the law of your state.
This means you could have unwanted heirs inheriting your hard-earned assets.
Without an estate plan, you could also run into paying the government more in taxes than necessary.
Depending on your state of residence, you could have inheritance taxes, estate taxes, or both.
Proper planning can help you minimize the impact of these taxes on your estate.
Estate planning goes far beyond asset distribution.
You will need to plan for incapacity.
What happens if you can no longer make your own decisions?
Who will make medical choices on your behalf?
You will need an Advance Health Care Directive to designate an agent of your own choosing and give directions regarding your end-of-life care.
Doing so will take the pressure off of your loved ones.
After you have taken these steps, be sure you check your beneficiary designations on life insurance policies and retirement accounts.
If these are not updated you could unintentionally disinherit children born after your estate plan was initially created.
You could also leave your ex-spouse assets.
Neither of these is ideal.
Give your loved ones the gift of peace of mind.
Work with an experienced estate planning attorney to create a plan.
Reference: KTUU (August 14, 2019) “Estate planning dos and don’ts”