Know All Your Options

Estate plans are highly individualized and complicated. They cannot be done properly if you don’t consider your situation, inventory all of your assets, and research all of the options. This is true even if you hire a professional, since they need to know everything to make proper decisions and may not discuss all the options with you. 

Your Plan Needs to Be Appropriate for Your State

Your state will have its own inheritance, digital estate, estate, and income tax laws, probate process, and rules for wills and trusts. You must know these details and make your estate plan reflect them. 

If you are married, it is crucial to know if you live in a common law property state or a community property state, other state rules about joint ownership, and allowable transfer or payable on death options.

Your state may or may not have inheritance taxes and/or their own estate tax.

Consult a Professional

You are always better off going to an experienced estate planning lawyer or tax professional. They are more likely to:

  • Be aware of the nuances and details that will help you get it right;
  • Know the correct legal language to assure the plan is valid;
  • Understand and help you reduce the overall tax implications of your plan; and/or
  • Keep track of new laws and regulations.

Despite the fees, the money that can be saved in the long run is usually worth the expense.

A Residuary Clause is Needed

In addition to the inheritance of specific beneficiaries, your will and/or trust needs a residuary clause to account for any assets you may have forgotten or not added to the estate plan yet.

  • The residual estate will be these assets minus payments on any claims on your estate.
  • It will account for any assets that remain due to the death of any beneficiary.
  • This is usually done with a pour over will.

Plan for the Unexpected

No one expects to develop a long-term disability or a terminal illness, but your estate plan should account for it.

  • Make sure you are specific about who would handle your personal and financial affairs, whether a power of attorney or trustee.
  • You should include your instructions regarding the management of your finances, raising of your children, etc.
  • Choose back-up trustees or executors in case your primary agent becomes unavailable.

Account for unexpected deaths by designating contingent beneficiaries and back-up trustees or executors in case your primary choices die either before you or soon after.

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