There are countless reasons to prepare your estate plans sooner than later– especially with the uncertainty of the world we live in today. Don’t let life catch you off-guard! Here are five steps of how you can prepare your estate for whatever the future brings.
A durable power of attorney will determine who will handle your finances and medical care should you become unable or too incapacitated to manage your affairs on your own. This document only gives your agent– whether you select a friend, family member, or actual attorney to manage your estate– power until you become healthy enough to make and express decisions for yourself, concerning health care decisions and your finances. These documents are your most important estate planning documents while you are alive.
- Create A Will
The next step you should take when planning your estate is to draft a will and a living trust. Many people do not consider a trust because they are not “rich.” Well, the most important reasons to have a trust is to hold ownership of your assets in the trust, protecting them from creditors, and maintaining your privacy after your death. If you own real estate, funding the property into the trust minimizes or eliminates the need to go through the Probate process upon your death. Your Last Will & Testament ensures that all the assets you leave behind when you pass will go to the recipients of your choosing. With a trust, the Will “pours over” the assets into the trust and the trust then stipulates final distribution.
- Complete Beneficiary Forms
There are some assets that cannot be given through a will. This could include your retirement account and life insurance policies. To make sure they pass onto the right recipients– such as your spouse and children, you need to fill out beneficiary forms.
- Avoid Estate Taxes
The good news about estate taxes is that most people do not have to pay for them. The State government will only charge you estate taxes if your estate is over 4 million dollars in Illinois, and the Federal limit is $11.8 Million Dollars. Even so, if you ever accumulate more than 4 million dollars in your estate assets you can later pass it on to your beneficiaries tax-free with proper planning and a properly executed estate plan.
- Keep Estate Documents Safe and Organized
Lastly, it is crucial to keep all legal and estate documents safe and organized. Make sure to store them in organized folders where you can quickly and easily locate them. Ensure you’re your Agents, Executor, and Successor Trustee all have access and are aware of where to locate these original documents. Keep physical copies in a fireproof, waterproof, secure place. such as a safe or safety deposit box. Be sure to keep a copy on hand should you ever need to reference or change any documentation.
There are numerous ways you can prepare your estate for the future. However, there are also a lot of difficult choices you need to make. It is also imperative that you completely understand the legal language of your estate planning documents. At Piercey and Associates, LTD. we specialize in helping clients make plans for their estates. If you want to draft an estate plan hassle-free, contact our office or submit a question below.