How Do I Start My Estate Plan?

Estate planning design and implementation is not only complex but can be highly emotional. Therefore, it?s important to have a basic understanding of the estate planning process, before approaching a professional.

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Start my estate plan
Estate planning is a critical part of the retirement planning process. As we kick off the new year, this is a perfect time to ensure that your plan is up to date.
 
Things change over time. That includes our lives, our family, and even the laws that apply to estates. This means the wills, trusts, and other estate documents that protect our families and secure our legacies may need to change, too.
 
With that in mind, we’re thrilled to have Keith McManus, attorney at McManus Estate Planning, back on the podcast. In our conversation, we discussed the downside of not reviewing and updating your estate plan, different ways to protect your biggest asset such as the family home, and the pros and cons of life estates and much more.
 
In this podcast discussion, you’ll learn: 
  • Reasons why a “set it and forget it” strategy can put your estate at risk.
  • How to take advantage of incredible opportunities before the Tax Cuts and Jobs Act sunsets in 2025.
  • Why you may want to prepare estate plans to protect young adult children, even if they haven’t accumulated much wealth yet.
  • What it means to create a life estate–and the potential risks and benefits of this approach to retirement.
  • Why there’s no such thing as a cure-all trust–and how this makes estate planning more important than ever.
  • Why you never want to rely on a will as the backbone of your estate plan.

A common question for estate planning attorney on Cape Cod and Plymouth is: How do I start my estate plan?? First, congratulate yourself on taking a first step!? The decision to start an estate plan is critical for all families, but it can also be a challenge.

Before your first meeting, put together a list of your most significant assets and liabilities.? This will give Attorney McManus a starting point to determine your net worth, which is important for calculating estate tax exposure and identify unrealized capital gain.? Next, try to decide who you might want to inherit your assets when you pass away, and if you want to specify how those beneficiaries might use the assets.? Finally, try to decide who you want to make decisions for you if you are not well, and who might settle your estate when you pass on.

In many cases, the greatest impediment families face initially is discussing death, especially the deaths of family members. Forbes? recent article entitled ?Estate Planning 101: Tackling Your Estate Plan? suggests several life events that will trigger the need to create an estate plan for your family or business.? The article also reminds us that it?s important to think about what might happen to you or someone in your family, in the event of a substantial life change.

Here are some life events that can necessitate the need for an estate plan and a visit with your attorney:

  • A marriage;
  • The birth or adoption of a child or grandchild
  • The start of a new business
  • A significant increase in net worth
  • Changes in the tax laws
  • The death of a spouse or family member
  • Receiving an inheritance
  • A divorce
  • The sale of a business or property

There is no exact standard for when you should start creating your estate plan, but if any of these events happen to you or your family, it would be wise to start the conversation. While planning your estate may feel overwhelming, laborious, or expensive, not having a plan can be financially devastating, and can add stress to the situation.

Estate planning is a continuous process that should be tracked and reviewed annually. Let?s look at the steps for creating an estate plan:

Understand the Basics. First, learn the basics of estate planning and understand how the gift and estate tax laws may have an effect on your assets.

Identify Your Objectives. Map out your objectives and select possible guardians, executors, trustees, heirs and other details with your attorney. You should also draft a personal financial statement, detailing a breakdown of your assets and liabilities.

Look at Your Insurance. Third, you should review what you have for life insurance to be certain that it?s aligned with and structured appropriately for your objectives. You may need to look into life insurance as a way to protect your family and income, if you haven?t done so already.

Finalize the Design Of Your Estate Plan. Finalize your estate planning design with the help of your estate planning attorney. Review your fiduciaries and your will, powers of attorney, trusts, healthcare proxy and a living will.

Sign your Documents. Next, you need to sign the documents.

Visit Your Plan Periodically. Finally, review your plan every few years or when there is a life event in your family.

Now that you have the basics under your belt, it should feel easier to address this important task.

Reference: Forbes (March 11, 2020) ?Estate Planning 101: Tackling Your Estate Plan?

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