When should you begin an estate plan?

When to begin an estate plan?

It is never too early to begin estate planning!

The first step is to take stock of assets. The assets will include valuable items such as baseball card collections, jewelry, china set, or cars. The assets can also include investments, business interests, insurance policies, retirement accounts, or real estate.

The next step will be to decide what you want to achieve with the assets and who you want to inherit these assets. This will also be the time to think about those you want and trust to handle your medical care and business affairs in the event you will become incapacitated.

After a person decides the kinds of bequests they wish to make, they should discuss their plans with their loved ones and heirs. The clearer and sooner a person outlines his or her intentions to friends and family, the less chance of disagreements or arguments after a person’s death.

Once a person has a estate plan in place, they should review their plan over time. Estate planning should not be a one time deal. A person should review their plan every seven years. Their documents should be readdressed and adapt according to significant life events, more children, or changes to tax laws. It is important to keep tabs on investments and insurance policies, as they tend to tie into your estate plans and will fluctuate based on economic environments. If you make changes it will cost the same amount as it did when you created the documents.

How to begin an estate plan?

Every estate plan will begin with a living trust or will. A living will can provide a person’s instructions however; a will, will not avoid probate. The assets titled in a person’s name or is directed in their names will go through their state’s probate process before the assets will be distributed to their loved ones. If the deceased owns property in several other states, their loved ones may face several probates, according to the state laws.

The process will vary from state to state and it will become expensive with court costs, legal fees, and executor fees. It will also take nine months to two years or even longer. However, in rare exceptions, probate files will be open to the general public and that excluded loved ones will be encouraged to come forward and seek his or her share of the deceased’s estate. In other words, court systems, not families, control the estate process.

Once a person understands the importance of estate planning they can begin the process of estate planning by:

  • Making lists of their liabilities and assets
  • Seek the assistance of a certificated estate planning lawyer in their state
  • Begin a family discussion on who will become guardian of any minor children
  • Update and check current beneficiaries
  • Determine the distribution of the assets upon death such as charity or family
  • Review current federal estate tax exemptions limits
  • Discuss funeral arrangements with family and spouse