Caring for your family is a fundamental responsibility, especially if you are the provider. After all, your family relies on you to meet their basic needs, such as food, shelter, and clothing. However, our time in this world is limited, and we do not want our families to be left behind to face the future alone, yes? For this reason, estate planning is done.
Estate planning is organizing your financial and personal affairs to fulfill your wishes after you pass away. This includes naming beneficiaries, selecting guardians for minor children, and planning to distribute your assets through various legal documents, such as a will, trust, and power of attorney. While the process seems straightforward, many people do not consider doing it until late because they think nothing will happen to them, which is wrong.
If you do not know when to get estate planning done, here are some instances where you should:
#1 – You Are Terminally Ill
If you are terminally ill, getting your estate planning done as soon as possible is essential because you may have little time left. You want to ensure your wishes are carried out according to your preferences. This way, your family is cared for after you are gone, and your assets are distributed as you see fit.
#2 – You Own Various Assets
Assets are any tangible or intangible property with economic value. Estate planning divides your assets into two categories: probate assets and non-probate assets. Probate assets are subject to the court’s jurisdiction and must be distributed according to the terms of your will. Non-probate assets, on the other hand, are not subject to the court’s jurisdiction and can be distributed according to the terms of a trust or additional agreement.
#3 – You or Your Spouse Have Children from a Previous Marriage
If you or your spouse have a child from a previous marriage, estate planning can help to ensure that the child’s inheritance is protected and that the child’s best interests are considered. Conversely, estate planning can also help divide assets between the existing family and the child from the previous marriage to ensure equal treatment.
#4 – You Have Minor Beneficiaries
Your children and grandchildren can only manage their finances once they reach the age of majority. If you have minor beneficiaries, estate planning is essential to ensure that their inheritance is managed correctly until they reach adulthood. A trust can be established to hold the assets of the minor beneficiaries, and a trustee can be appointed to manage the trust assets. This trustee can be responsible for investing the assets, making distributions to the minor beneficiaries, and ensuring that the assets are used for the minor beneficiaries’ benefit.
#5 – You Are Responsible for a Dependent Adult
If you are responsible for a dependent adult, such as a family member with a physical disability, estate planning is essential. You can create a special needs trust to protect the assets of the dependent adult and ensure that they are used for their benefit. This trust can provide for the care and support of the dependent adult and their long-term financial security.
#6 – Your Estate Is Taxable
Estate taxes are taxes imposed on transferring your property to another person or entity upon death. Depending on the value of your estate, you may be subject to estate taxes, which can be a significant burden for your family or heirs. Estate planning can help reduce your estate taxes because it allows you to structure the transfer of your assets to minimize the amount of taxes owed through trusts, gifting, and other strategies.
#7 – You Have a 401(K) Or an IRA Account
If you have a 401(k) or an IRA account, estate planning is essential to ensure that these assets are appropriately managed after you are gone. With a 401(k) or IRA, you can designate a beneficiary or beneficiary to receive the funds upon death. You must keep these beneficiary designations updated to ensure your wishes are fulfilled.
If you have no plans for your estate, there is no better time than now to start. Estate planning is an integral part of financial planning and can help ensure that your wishes are fulfilled in the event of your death. This way, your assets are distributed according to your desires, and your family will be financially taken care of.
If you are looking for an estate planning lawyer in SC, Steltzner Law Firm can help! We understand the legal complexities of estate planning, so we will work with you to develop a plan according to your wishes. Call us today at 803-329-3777 for a consultation!