When Is The Best Time To Create An Estate Plan?
Why is it important to have an estate plan?
An estate plan is important for anyone who wants their assets to be transferred to their surviving loved ones after they pass. Unfortunately, many Americans pass away without a valid will. Proper planning can ensure that you have control over what happens to your estate when you die.
When should I start creating an estate plan?
Simply put, the best time to create an estate plan is when you become an adult. However, it’s also important to review your estate plan about every two years. You should also have an attorney review it every five years to see if it needs to be updated in accordance with new laws. Here are some life events that can be a sign that it’s time to start or reassess your estate plan:
Birth of a child
Buying a home
Marriage
Divorce
Death of a loved one
Inheriting something
Any other milestones that add to your wealth or impact how you want your assets distributed after you’re gone
What kind of estate planning is right for me?
Depending on your assets, family relationships, and goals, your attorney may recommend one or a combination of some of the following: Powers of Attorney, Last Will and Testament, Living Will, or Trust. Only an attorney can help decide what is right for your situation.
What’s the difference between a will and a trust?
A will becomes active after one’s death, while a trust becomes active the day you create it. A will expresses a deceased person’s wishes, which may include naming a guardian for minor children or bequeathing objects or assets to certain people or organizations. A trust allows the grantor (the person creating the trust) to list how they want their assets to be distributed both prior to and after their death. There are irrevocable trusts, which cannot be altered after their creation and are often used for tax purposes, and revocable or living trusts, which can be changed by the grantor.
I’m not elderly, so I can put this off – right?
Life can change in the blink of an eye, so it’s important for younger people to have wills too. This is especially true if you have minor children. A will can make sure that your children would be cared for by whoever you choose to name as guardian.
I’ll be gone – so who cares?
There are also documents that can affect you during your lifetime. This includes a financial and legal power-of-attorney, which grants someone the power to make your financial decisions if you are unable to do so on your own.
Another one of these is a health care power-of-attorney. This can be the same document or a separate one, where you can name someone you trust to make decision regarding your health care and well being if you are unable to speak for yourself.
Not sure where to start? Give us a call at (859) 281-0048!