"Look to your health; and if you have it, praise God, and value it next to a good conscience; for health is the second blessing that we mortals are capable of; a blessing that money cannot buy." - Izaak Walton
The number of adults who have planned their estate has decreased by 25% since 2017, according to Caring.com. This unfortunate statistic is often due to the fact that most people don’t know how to plan their estate or write a will in the first place. Some put it off because they don’t think they’re at the age where they have to worry about it yet.
But the truth is, the best time to begin estate planning is well before retirement. If you’re someone who wants to get their affairs in order but don’t know where to start, follow these three steps when planning your estate.
Take Stock Of Your Assets
The first step in planning for your estate is to figure out what it’s going to be made up of. This can be subdivided into tangible and intangible assets. Tangible assets are your material possessions, excluding money. These include things such as heirlooms, collectibles, vehicles, real estate, and other objects.
To make your inventory estimates more accurate, it’s advisable to get some outside valuations done. Outside evaluations must include things such as account statements and asset appraisals.
Consider the Legal Aspect of Estate Planning
Before acting on anything, it’s important to note estate and inheritance laws in your state. Only 12 states have estate taxes, but inheritance taxes are another matter. While there is no federal inheritance tax, your inheritors will have to pay taxes if they live in certain states.
Exceptions to the usual tax exemptions do apply on a state-to-state basis. So, it’s best to seek out the help of an estate planning lawyer to navigate the legal side of things. Such professional help can prove valuable even if you have a modest estate. They will have a much more thorough hand in guiding you through the nuances of estate planning than online services.
Establish Your Directives
Now comes the planning itself. Aside from ensuring that the right bequeathments go to the right heirs, you should also consider how to keep these assets in their hands. This is particularly important for heirs below legal age.
Name a designated estate guardian to prevent any family disputes. It is important to avoid any family court fights that might develop. For the best results, it is advisable that you write down your specific directives. This gives them concrete evidence to present if they ever have to take things to court.
This is also the time to be designating other directives, such as what type of power of attorney to give. You can give someone durable financial power of attorney if you trust them enough, so they can freely handle your affairs. If not, give them limited power of attorney to guide their actions in a more favorable direction.
In the event of life changes, it’s also important that you keep your estate flexible and easily revised. Consult your estate planner on how to make this process as effortless as possible.