Estate planning does not have to be an overwhelming and upsetting process; on the contrary, it can be a truly stress free experience that will allow you to rest easy in the knowledge that your family and loved ones will not left struggling – both emotionally and financially – to fulfill your final wishes after you pass away.
Here are ten simply tips that can help anyone with their estate planning.
- It can be easier than you think –It’s true! Whether you hire a professional or use a well rated DIY software program, estate planning is far less time consuming that you might think it is. Decide who you want to leave what assets to, sign in front of witnesses and you’re done – it doesn’t need to be filed legally, just make sure it is accessible for your loved ones when you pass away.
- Your retirement plan is inheritable. Your spouse will automatically inherit all of the money in your 401(k), but if you would like this to go to someone else you must make this clear in writing.
- Think about your pets. Detailed plans (and financial arrangements) should be made for your pets, and it is always a good idea to clear these with the person you plan to name as the new owner!
- You probably do not need to worry about estate tax. Most people do not need to worry about federal estate tax unless you their estate is larger than 98% of the estates in the US.
- Is this money taxable for inheritors? In most cases, recipients will not pay any income tax on money that they inherit. Some exceptions do apply, so be sure to consult with a South Lake Tahoe Estate Planning Lawyer to find out more about your specific situation.
- Do you need a living trust? A living trust is a will substitute that could let your family skip probate court after your demise. That said, most people do not need a living will until they are much older or are seriously ill – until that point, a simple will is usually good enough.
- Be specific about your possessions – Some of the bitterest family feuds can be sparked by a small sentimental item that has only small monetary value. To avoid this, be almost too specific about what should happen to all of your effects and family heirlooms.
- Ensure your business is taken care of. If you own even a small business, you need to make detailed plans for what should happen to it in the event of your death.
- Don’t hide your documents! You can spend loads of time and money preparing your will, but all of this will go to waste if your family or loved ones cannot find the documents after you are gone – make sure they are accessible and that at least three people know where they are!
- Most importantly, remember that this is all your decision. Do not feel pressured to do things the “normal way” – if you want to forego leaving money to your children in lieu of supporting a charity that you feel strongly about, that is absolutely your choice. (One tip: if you do decide to leave your kids out of the will, list them so that it cannot be argued that they were mistakenly overlooked).