Estate planning is often only considered essential for wealthy or older individuals. If you have loved ones, however, you should have some form of estate plan regardless of your level of wealth.
Estate planning means providing for your family after you are gone. It allows you, not the court, to make important decisions about caring for your loved ones and the disposition of your property.
With a proper estate plan you can address these major issues:
- Who do you want as the executor to settle your estate? That person should be someone who is qualified, trustworthy and understands your wishes.
- How will any minor children be protected? This includes naming a guardian on the death of both parents and making decisions about the future financial security of the children.
- How will your assets be distributed? Wills are used to designate who will receive your assets. Trusts may be useful for the ongoing management and distribution of your assets.
- How can the costs of administrating your estate be minimized? Proper planning can reduce probate fees and any estate taxes.
Federal Estate Taxes
The tax treatment of estates has been changing almost annually for several years. The American Taxpayer Relief Act of 2012 clarified many of the rules and has made many provisions permanent. These changes should prompt everyone to have their estate plan reviewed.