Do you think you do not have enough assets for estate planning?
The federal estate tax exemption is $11.7 million. Even when your assets are below this value, there are many benefits to estate planning. It is one way to care for your loved ones even after you pass away.
However, estate planning can be a long process. The good news is you can start planning for it as soon as possible. Read on as we discuss these estate planning tips to help:
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Take an Inventory of Your Assets
No matter how many assets you have, create an inventory. The amount of tangible and intangible assets you possess might surprise you. To start, go through all the items in your home, such as:
- Furniture
- Appliances
- Jewelry
- Vehicles
- Collectibles
You need not designate a recipient for each item right away. However, take notes as you go. Next, list your intangible assets, including:
- Bank accounts
- Life insurance policies
- Retirement plans
- Stocks and bonds
- Ownership in business
- Social media accounts and passwords
Estimate the value of these assets using outside valuation. You can also assign its worth based on how much you expect your heirs to value them.
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Assemble a Team
For the best estate planning tips, you need the right team. Get an estate planning attorney, a tax professional, and a financial advisor.
They can give you professional estate planning advice. Doing this ensures you and your heirs will have no problem carrying out your wishes.
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Draft a Will
The next step is writing a will—the guide your attorney and heirs will follow about the distribution of your assets. It can also designate a guardian for your children and pets.
A lawyer can help you create a will for a small fee. You can even write your own using online services. Learn the types of will to know the documents you should prepare.
Write a letter of instruction for your wishes about things like your funeral or social media accounts. You also have to draft a living will or a medical care directive. It spells out your wants and not-wants regarding treatments when you cannot speak for yourself.
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Consider Trusts
Consider creating a trust fund since it helps you manage and distribute your assets even while you’re still alive. A trustee takes over when you become ill or incapacitated. In the event of death, the trust transfers the assets to your beneficiaries.
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Plan for Taxes
Your estate might become subject to federal and state estate taxes. In this case, your beneficiaries must pay the taxes within nine months of your passing.
They have to pay in cash, which can be an issue when your assets are not in cash. Work with your team to plan tax strategies.
Revisit These Estate Planning Tips Now
When circumstances change, consider revisiting these estate planning tips. Reassess your plan every few years since some law changes may have happened. To make it easier to revise your plan, create an estate planning checklist.
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