Yes, estate planning isn't just for those in their 60s. For young professionals finding their way in the world and just beginning the journey of building wealth, death can seem like a far-off abstraction. However, the cold reality is that no one ever knows what’s around the corner — health problems and freak accidents can happen at virtually any time. If you have assets that you want to pass on to your heirs, you need an estate plan today. Forbes’ recent article entitled “A Love Letter to Your Heirs” explains why not having an estate plan is risky - can lead to your estate going into probate, almost like riding in a speeding car on the freeway without wearing a seatbelt.
Think About Your Future
The first step is to create a vision of your future. Consider the most important people in your life or your charitable goals. This should help with the distribution of your assets. Then, plan who gets what, both when and how.
Remember that you can modify your estate plan over time. You should also develop and implement a financial plan to provide ongoing guidance for your long-term wealth accumulation goals. This means reviewing your will and estate plan regularly, especially if your investment portfolio becomes more complex and when your family situation changes, such as the birth of a child or even a divorce.
An Estate Planning Attorney Can Help
Are you familiarly with the ins and outs of taxes related to assets? Well, an experienced estate planning attorney, such as Thomas A. Vick, can guide you through implementing tax mitigation strategies to reduce or eliminate taxes. This is important, as different types of assets can and should get different treatment. For instance, you should handle assets you own outright with care. Consider assigning ownership for each treasured heirloom, even as that can seem tedious. Another option is to allow heirs to place bids on items, using money allocated to them from the estate.
Based on the asset and how liquid it is, the executor could either sell it to raise cash or retain it and then distribute it to heirs under the terms of the will. Other assets, such as those held jointly, will go directly to the surviving joint tenant, while qualified retirement plan assets — like IRAs, 401(k)s, 403(b)s, profit-sharing plans, and pension plans will go directly to a named beneficiary. Similarly, life insurance proceeds pass directly to a named beneficiary. In addition any assets subject to a lien can be sold to pay off outstanding debt, or your executor can use cash from the estate to pay off the debt and retain the asset.
Handing over your estate to a chosen beneficiary or contingent beneficiary can be one of the most important life decisions you can make for their future. No matter your circumstance, an estate plan can ensure the money or assets you've worked so hard for are able to support the the people or organizations you care most about.
Contact Vick Law, P.C. today to create an estate plan that fits your needs.
Reference: Forbes (Jan. 10, 2022) “A Love Letter to Your Heirs”