Planning for our final arrangements is, at best, a touchy subject. It can be an unpleasant task, but it is also a necessary one. This is especially true if you have property or assets you wish to leave loved ones. While the thought of planning what happens to your estate may seem overwhelming, never fear! We cover estate planning basics in today’s blog post.
Estate Planning Basics
No matter the size of your estate, one thing is for certain: without a proper estate plan, your assets and property might not go to the right people. While the topic of a will or estate plan can be a sensitive one, it is a conversation that must occur. The tips in this article cover estate planning basics. While they are a great place to get started, we always recommend you seek a professional ESTATE PLANNING CONSULTANT
One of the biggest questions we see from people regarding estate plans centers around age; that is, what is the proper age to create your estate plan? The answer to that is simple: as early as possible. Life is full of uncertainties, so we always want to prepare for the worst. Whether you are thirty, forty, or 80, it is never too soon – or too late – to get your plan in place.
It is always important to note that an estate plan is not set in stone. If you create your plan at the age of thirty, you can make changes as you see fit. Perhaps you add new family members or your assets grow over the years. Whatever the case, know that you have the option to update your document at any time.
What Happens If I Don’t Have An Estate Plan?
A common misconception people have regarding their assets is that they automatically go to whom they intend. Another assumption is that surviving family members will fairly divide the assets. Unfortunately, that is not always the case. In fact, leaving the decision to your family can often lead to bitterness and strife.
The truth of the matter is, if you do not have a will, the State will determine what happens to your assets. For instance, if you are not married and have no children, your property might go to your parents; it also might go to your brothers or sisters – it all depends on what the court decides.
If you are engaged but not married, your fiancee will likely not inherit anything. In this situation, the State may well award the assets to your remaining family. It does not matter if that was your intent; without an estate plan in place, the court has no idea what your last wishes were.
Learn more about estate planning basics from the America Bar Association (ABA).
Steps to Proper Estate Planning
The first step you want to take when you are planning what happens to your estate is to gather a list of your current assets. Include things such as property, money, stocks, vehicles, and any other valuables. In addition, be sure to make a note of items of sentimental value as well.
Next, start planning out who will receive which assets in the event of your passing. Note that this will not be a binding document; it is simply a reference point for when you speak to an estate planning consultant.
For certain assets – such as money or items that get liquidated – you may wish to decide how the money gets spent. For example, you might want to leave your daughter $100,000. If that money, you might want $10,000 to go to a college fund.
Next, you will want to consider how to minimize estate taxes and income taxes. Beneficiaries will be liable for estate and income tax on any assets they inherit. There are ways to minimize these taxes. For instance, life insurance and Roth retirement accounts are not taxable. You might also consider gifting some of your assets prior to passing, as you may gift less than $13,000 per year, per person without tax penalties.
Rhode Island Estate Planning
Are you looking for a Rhode Island estate planning attorney? The Law Offices of Howe and Garside, Ltd. are dedicated to estate planning and elder law. Our team works every day to ensure our client’s final wishes get met. From wills and trusts to a durable power of attorney and estate planning, you can count on our team to help you every step of the way; from planning to final documentation.