5 Things To Consider For Estate Planning
Here’s the scenario.
You’re at a position where you’re ready to start thinking about your estate and what it is you want to do when you’re gone. This is one of the smartest things you can do for yourself and for your family to make sure everything goes smoothly, even if it’s a topic you mentally want to avoid.
With it being a big step, there are some things you’re going to have to consider before going forward with the process. They won’t necessarily impede what you want to do, but they could be an impediment later down the line.
1. Outstanding financial liabilities. If you have any big bills hanging out there, or a lot of bills, your estate is going to have to deal with them. In some states, unless everything goes to the spouse, your creditors will get paid first. If the bills are high, it could even mean your property might have to be sold to cover those debts.
2. Planning for your old age. This might seem depressing but so many people get caught off guard when they start getting older and sicker. In most states there are rules for how much of your estate is allowed to be kept if you have to go into a nursing home and you don’t have enough insurance to cover you, thus meaning your family has to apply for Medicaid for you. This means you have to worry about how much money there is, how much property, and how far in advance some of your property is in someone else’s name so it will be protected.
3. Determining how much family members will receive from your estate. Unfortunately there are estate taxes that have to be paid and if you give too little your family member or other beneficiaries might not end up with as much as you wanted them to have. The lucky thing for the majority is that right now those estate taxes only cover those estates worth more than $1 million.
4. Who do you want to give to, and what? Are you giving to your family members? Friends? Charity or other donations? Are there people you want to exclude? Are their specific items you want to go to certain people? This can be a laborious process if you have a lot of items and want to break things up among many of the people you know.
5. Determining your assets. What are you worth? What is the value of your property, items in your house, stocks and bonds, etc? This can help you decide who gets what and how much, even if you decide to only go on a percentage basis. However, that really only works best when you’re talking about money; if you’re talking about assets, without being specific because you don’t know how much your assets are worth, you could be setting your estate up for a battle later on.