A lot of people believe an estate plan is not necessary. More than half of Americans fail to have a will and an even smaller number has an estate plan in order. Estate plans are extremely important when it comes to distributing your assets, leaving legacy wishes and help your family pay less in taxes and court costs.
Many people believe that a will and an estate plan are the same thing. There are differences and in the end not everyone needs an estate plan. Here are some questions to help you get started:
- Are there children involved?
- an estate plan may be necessary if a minor child will be receiving assets
- The size of the estate and the state of residence
- if an estate exceeds the estate tax exclusion, an estate plan may be necessary
- Can your 401k be stretched?
- If you’re leaving money to a child or grandchild who is significantly younger than you, an estate plan is necessary so that tax-deferred or tax-free growth can be taken into account
- Is privacy important?
- if privacy is your top priority, an estate plan is a better option than a will
- Would you like money to go to charity?
- Charities can be named recipients in estate plans
- Do you need to pass on a business?
- transferring business assets is more organized and detailed in an estate plan
- What is your current stage in life?
- there is no specific time that is best to start an estate plan, but a new parent should heavily consider it
- Are there special circumstances in your family?
- blended families and families with disabilities should consider an estate plan, it would be much easier to draft with an elder law attorney