People tend to put off creating an estate plan because they do not like thinking about sensitive topics, but it is important not to procrastinate. The holiday season can actually be a good time to create an estate plan, even though it may not seem that way at first glance.
You can make your estate plan without consulting family members, but having their input can make matters easier for everyone in the long run. As part of the planning process, you will need to choose an executor and make other important decisions, such as who will be gaining ownership of your possessions.
You are more likely to see family members at holiday gatherings. This is when people travel from out of town and children come home from college. This is one of the few times of the year when everyone may be in the same place. Just make sure to let them know ahead of time that you are planning to discuss an estate plan.
Creating an estate plan can also be seen as a gift to your loved ones. Believe it or not, more than 60 percent of Americans do not have an estate plan, and assets end up getting divided and taxed, according to state and federal laws. You and your family probably do not want to see this happen.
What Are the Benefits of an Estate Plan?
Without this kind of planning, a deceased person’s estate will go into probate court. When that happens, probate records become public. Strangers can learn about how much money you had, what you owned, and other private details. An estate plan keeps all of this under wraps, protecting your privacy.
The probate process also incurs costs that can significantly lessen the inheritance that your beneficiaries end up receiving. An estate plan can keep many assets out of probate, and it can also reduce the taxes that would otherwise be owed by the estate. This way, your assets will go to your beloved family members.
Another benefit is that an estate plan guards against uncertain futures. Putting important matters off until the unforeseeable future could end up costing you and your family. You may not like to think about these sensitive topics, but waiting until it is too late means that your loved ones might not be able to receive the assets, items, etc. that you wanted them to have once you are gone.
Creating an estate plan is not as difficult as you might think, especially with help from a lawyer. A lawyer will handle most of the work, and once it is finished, you will have that burden lifted off your shoulders.
There are other ways to plan for your future as well. Young adults who plan for their retirement can find themselves in a better position when it is time to retire, and they may even be able to do it sooner. Older family members can open up individualized retirement accounts (IRAs) for their children and grandchildren.
New parents can also draft wills to provide for their children in case something happens, and they can also start 529 plans. A 529 plan is designed to encourage saving for education costs. Grandparents often give this as a gift. If you decide to do this, you can list yourself as the account owner, and the funds will not be considered if the child has to apply for financial aid for their education. Other rules apply for these accounts, so make sure that you understand them ahead of time.
Can I Update My Estate Plan?
Having an estate plan is important, but it is also vital to keep it updated. Once the plan is complete, it does not have to be set in stone. There are many life events that warrant you to update your estate plan. For example, if you experience a contentious divorce, you will want to update your estate plan. You can also do an annual review during the holiday season. Some life events that can affect your estate plan include:
- Wedding, separation, and divorce.
- Birth or adoption of child.
- Children are grown up.
- Increase or decrease in assets.
- Opened or sold a business.
- Charitable contributions.
- Loss of a loved one.
In addition to these major life events, you might also want to revise some of the specifics of the estate plan. You might have to update your trustees, guardians, or executors for multiple reasons. You might also want to add or omit beneficiaries or redistribute assets. If you need help creating or making adjustments to an estate plan, you should contact a lawyer.
Warren Wills, Trusts, and Estates Lawyers at Herold Law Help Individuals Who Have Estate Planning Needs During the Holidays
If you are gathering with family for the holidays, it might be a good time to discuss your estate plan. Our Warren wills, trusts, and estates lawyers at Herold Law, P.A. can handle the legalities of your estate plan. Call us at 908-647-1022 or complete our online form for an initial consultation. We are located in Warren, New Jersey, and we serve clients throughout the surrounding areas, including Plainfield.