If you think about it, a lot of the knowledge that you take for granted was absorbed from your environment. You hear people talking about certain subjects, general information sinks in, and it helps you understand and act on the situations that arise.
When it comes to estate planning, there are not many conversations about the subject, and you are not going to see a lot of random articles and social media posts that explain the process.
Clearly, passing away is at the bottom of every to-do list, and death is a subject that most people do not like to contemplate or discuss. At the same time, it is inevitable for all of us, and you should do what it takes to make sure that your loved ones receive their inheritances.
With this in mind, we will provide four estate planning tips in this post to help you develop an effective plan that will help you understand how to proceed.
Don’t assume that a simple will is the right asset transfer vehicle.
Far too many people reduce estate planning to the creation of a simple will. They feel as though they can put the document together when they are old and gray, and there is nothing else to think about.
Clearly, a will can be used to facilitate asset transfers, but there are other options. Multiple types of trusts can be used to achieve certain specific objectives that are common to most people.
For example, you probably want your loved ones to receive their inheritances in a timely manner with no legal hurdles to cross before their bequests are distributed. If you use a will, it would be admitted to probate, which is a legal process that takes place under the supervision of a court.
There is no consolidation of asset ownership so the identification and inventory process can be complicated, and creditors are given time to come forward seeking satisfaction. No inheritances are distributed while the estate is being probated by the court.
If you use a living trust instead of a will as the centerpiece of your estate plan, probate would not be a factor. Plus, you can include a spendthrift clause that would protect the principal from the beneficiary’s creditors, and you can provide limited distributions over time.
This is just one example so you should work with an estate planning lawyer to learn about your options so you can make informed decisions.
Create an estate plan as soon as there are people relying on you.
The vast majority of younger adults do not have estate plans in place. Caring.com has been conducting surveys annually, and they have found that 26.8 percent of people between the ages of 18 and 34 had wills or trusts in 2021.
For people to 35 to 54 age group, the figure was 22.5 percent. Clearly, people do not usually pass away when they are in their 50s or younger, but it does happen. Plus, many individuals in these groups are the parents of dependent children.
You are taking a significant risk if you go through life without an estate plan as a parent, and this applies to your spouse as well if you are married. It is important to name a guardian who would care for your children in a will, and you should make sure that you carry sufficient life insurance.
If you have a living trust, the trustee you designate would manage the assets for a child beneficiary, and you can include a testamentary trust if you have a will.
Your estate plan should also include a living will and a durable power of attorney for health care. The former document is used to state your life support preferences, and you name someone to make medical decisions on your behalf in a durable health care power of attorney.
Prepare for long-term care costs.
Just over 50 percent of seniors will need paid long-term care eventually, and Medicare does not pay for custodial care. Nursing homes and in-home caregivers come with some hefty price tags so long-term care costs could devastate your legacy.
Medicaid will cover long-term care, but it is a need-based program so you cannot qualify if you have more than $2000 in countable assets. If you take the right steps in advance, you can position your assets wisely with future Medicaid eligibility in mind.
Schedule a Consultation Today!
We are here to help if you are ready to work with a Charlotte, North Carolina or Huntersville, North Carolina estate planning lawyer to put a custom crafted plan in place. You can schedule a consultation right now if you call us at 704-944-3245.
The number in Ashland, Kentucky is 606-324-5516, and the number in Florence, Kentucky is 859-372-6655. You can also fill out our contact form if you would prefer to send us a message.