While planning your estate can be challenging, it is a crucial step in ensuring financial stability for your family well into the future. A comprehensive estate plan goes well beyond deciding where your money will go when you are no longer here. In addition to deciding where to funnel your money, you also need to protect your own health and your family from having to make hard decisions. Here are three things to keep in mind when planning your estate.
Taxes
Taxes are a necessary part of life and must be considered when planning your estate. Understanding the tax implications of your estate will help you to plan how to maximize the amount of money you leave to your family. Be sure to take into consideration the maximum estate tax exemption so that you know the amount that your inheritors will be responsible for paying. While the overwhelming majority of estates will not be subject to pay the federal estate tax, there are additional financial implications to consider when making these decisions.
Your Inheritors
Setting up a trust for your inheritors has many benefits. The assets of your minor children should also be held in a trust. Once your kids are in their 20s, it is important to separate their inheritance so that there are no issues. At the end of the day, the goal is to protect your inheritors so that they are set up to be able to spend the money responsibly.
Advance Health Directives
Although it is not easy to think about your failing health in the future, you will be doing a great disservice to your family if you do not include these directives in your overall estate plan. Establishing a health care power of attorney will help you to make important decisions about your medical care so that this burden does not rest with your family. It is also vital to look into disability planning. Be sure to express your wishes to both your doctor and your lawyer so that everyone is on the same page.
Before you embark on this step of planning your estate, it is important that you understand all of the financial details and how they will affect what you plan to leave for your family. You will sleep better at night if you have sufficiently planned for how your inheritors will get by after you are gone.
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