Do you believe that estate planning is only about making a Will? You are unfortunately acting with only half the information. There is a lot more to the process. You should get in touch with an estate planning professional in New York for a full consultation about how to keep your estate safe for your children. It is a good idea to do some research yourself, but in the long run, it is best to leave it to the ones who know best.
Estate Planning Is About Making Only A Will
You might be thinking that all your planning can be contained in a Will. But, a Will can allocate only the assets you own singly to your beneficiaries. The other assets that you own in partnership will not be covered. If your home is in joint ownership with your spouse, it cannot be willed.
Any assets like a joint account in your bank or a clubbed retirement plan with your spouse are not admissible. Insurance plans that have beneficiary designations also cannot be included in a will. So, it is not enough to make a will!
Estate Planning Is Applicable After Death
There are many DIY kits and software available in the market that tell you that estate planning is all about leaving your assets behind sensibly. The truth is very different. You need to plan what your end of life medical directives will look like. You need to give a trusted person the ability to handle your assets when you are incapable or old.
Durable Power Of Attorney
It gives your agent the power to handle and manage your financial affairs as per your predetermined wishes. This comes into play if you are physically or mentally incapable of taking your own decisions. The end of life medical decisions can also be given to an Advanced Health directive. The healthcare directive comes into play when you are in need of ‘extraordinary’ measures in medical care. Your loved ones are directed to follow your instructions as you have mentioned in the document.
You can create revocable living trusts to park your assets. They are directly passed on to your beneficiaries as they belong to the trust and not directly to you. You can keep them out of probate and save in inheritance taxes. Additionally, you can grant guardianship of your assets to appointees in your trust.
You Can Leave Estate Planning Till Old Age
It is the biggest myth of the financial world. You can die anytime. Death is inevitable. You should make an estate plan as it will keep your assets from passing into the guardianship of the state. That may herald financial trouble for your spouse till the probate is done. You might not be able to distribute your assets as per your choice.
If you have minor children, it may be a good idea to assign guardianship to a trusted person. The courts may grant it to someone you deemed inappropriate. It is a lot to ask of your loved ones to handle the situation when they are already grieving. They might not be in a situation to understand or handle legal issues.
Estate planning Is Too Expensive
Yes, it is not cheap to get a professional to plan your financial assets. But in the long run, it may save you thousands of dollars. You will be able to plan with tax efficiency, stave off probate, create a sizeable legacy for your children and specify your own power of attorney. The best part is that you can ward off creditors and ex-spouses from misappropriating your assets after your death.
There are multiple ways you can help your beneficiaries save money after you die. They will save in taxes and legal fees. They will also save time and effort that does translate into money. After all time is money too.
Estate Planning Is Not For Me
Estate planning is for everyone. You can be rich with multiple assets or average with a lesser number of assets, you will need to plan. Rich people plan to save tax and create a bigger estate. The middle class should plan to avoid strife and confusion. There are too many instances of children fighting for the property. Spouses remarry and your assets might pass on to someone you do not want to give them to. There are many things that may go wrong. It is better to create an estate plan while you can to protect your hard-earned assets for your family.