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If you're like many, thinking about the end of life decisions might be challenging. However, estate planning shouldn't be a daunting experience. That's because it allows you to prepare your legacy, and you can rest assured of your wishes once you're gone. In this quick guide, you'll learn the basics of estate planning for a secure future.
Estate planning outlines how you want your financial and personal affairs to be dealt with in case of death or incapacity. It also includes the implementation of those wishes. Everyone's financial status is unique, and there might be no one-size-fits-all plan. However, a professional can help you throughout the process. It ensures you get everything right.
Regardless of the property you own or your age, having an estate plan in place is something you don't want to overlook. If something occurs when you don't have an estate plan, the government decides everything for you. Unfortunately, this may not match your wishes, meaning it would be better to prepare for the unknown. This can save your surviving family members emotional stress, money, and time. If you plan in your 30s, ensure you update everything as you age, have children or a family.
A last will is a critical document that states your final wishes. It is best to ensure that it is as detailed as possible during preparation. A will maps out how you want your property to be distributed after death. It outlines several things, including:
Appropriately preparing this document is critical to avoid possible issues after death. You want to keep it updated by making changes when necessary. If you aren't sure what to do, consulting an experienced estate planning financial advisor can help. We can review your personalized needs and guide you accordingly.
The legal process to oversee the distribution of your assets after you're is known as probate. You can name beneficiaries to get particular assets to avoid the process. These may include retirement accounts, living trust, or life insurance.
Probate can be time-consuming and costly depending on your assets' complexity and state. That's why many individuals want to avoid the process and make things straightforward for the rest of the family members.
The executor you choose is responsible for handling your estate's tax bills. Typically, the money originates from your estate, such as bank accounts. Your executor can go for asset liquidation to offset some debts if necessary.
The executor files an income tax on your behalf and the estate if it generates income. They also deal with any property taxes, such as:
Estate tax: applies to your property before distribution to heirs. However, this occurs in wealthy states.
Inheritance tax: impacts individuals benefiting from your assets. The amount they may pay depends on the inherited estate.
What is the Difference Between Will and Estate Planning?
Estate planning involves a wider action plan for your belongings. It applies during your life and after you're gone. On the flip side, a will outlines where you want your assets to go after death, minor's guardians, and more.
When Should I Start an Estate Plan?
According to financial estate planning experts, you need to consider it once you're a legal adult. It's imperative to update it regularly, especially after a significant milestone such as marriage or divorce.
Who needs an Estate Plan?
Do you want one or more surviving family members to receive your assets after death? You want a formal estate plan. The legal documents you prepare are vital and ensure your wishes are met when you cannot speak for yourself.
What should be included in Estate Planning?
Estate planning involves several documents, such as:
For a comprehensive review of your personal situation, always consult with a tax or legal advisor. Neither Cetera Advisors LLC nor any of its representatives may give legal or tax advice.
If you're looking to develop your estate plan, it's imperative to work with a reliable expert. It will ensure you navigate the process with minimal glitches and avoid possible future issues. Visit our website to find out more or contact us. We will be happy to help you!
TBurton@BurtonWealthMgmt.com | (412) 749-0107