Although most people don’t like to envision their mortality, it’s a fact of life, and whether you have a large estate or a small one, adequate estate planning will ensure that the distribution of your assets will be according to your wishes.
Those who have a small or smaller estate may think that they can adequately compose a competent and comprehensive distribution of their assets that will be legally binding, but this may not be the case even with a small estate.
1. What Are The Complications Of DIY Estate Planning?
State law governing the distribution of assets of even a small estate will vary, and a form that may be appropriate in one state may have unintended consequences in another state. If you’re using an online form, you’ll probably not be speaking with an attorney and you may omit a necessary phrase or form that can invalidate your entire document, and you may be missing a form that’s essential, such as a will or trust. Trusts are complex and there are many types of trusts, so if you want or need a trust, then it should be prepared by a legal professional.
2. Does Estate Planning Provide Adequate Protection?
Estate plans protect your beneficiaries from circumstances or entities that can compromise your intentions, such as:
- Overzealous or unscrupulous guardians
Adequate estate planning will also ensure that your estate is distributed to those you want it to be and not to those you don’t. A good estate plan can prevent many lawsuits and family squabbles and alleviate additional stress on your loved ones.
3. Is An Estate Plan The Same As A Will Or A Trust?
Your estate plan will probably include a will and may include a trust, both of which can protect the distribution of your assets and lessen the court costs, fees, and taxes that your heirs may incur. The estate plan is the overall package that contains specific documents such as a living will, advanced health care directive, will, testament, trust, and so forth. Many people include their advanced health care directive in their estate plan so that their end-of-life wishes are fulfilled, which also eases the burden on their family.
4. What Documents Should Be In An Estate Plan?
At a minimum, your estate plan should contain:
- Your will
- Your living will, which is also called an advanced health care directive or simply advanced directive
- Durable power of attorney for health care
- Durable power of attorney for financial decisions
These documents should be prepared by a legal professional in order to be valid. Although laws vary by state, legal documents that are professionally prepared should be valid in all states whereas those prepared by an individual may not be. You’ll need to name an executor for your will and trust, so be sure to ask a trusted friend or relative ahead of time if they’re willing to be the executor of your estate. It may take up to a year to process, depending on several factors, so be sure that your nominee is agreeable to the position.
5. Estate Planning Can Keep Your Business And Your Household Running Smoothly
Part of an estate plan is appointing someone whom you trust to ensure that your bills are paid timely and your business affairs are conducted properly in case you become mentally incapacitated. Particularly if your business is the sole source of income for you and your family, selecting a professional executor or manager to conduct your affairs is the prudent choice.
6. Minimizing Your Estate Expenses
A legal professional can advise you on the best methods and strategies for minimizing estate taxes and fees which can otherwise become quite costly. Strategies such as deferring distribution or designating beneficiaries may seem simple, but they can substantially reduce the amount of money that comes from your estate.
7. Protect Your Electronic Assets
Although we generally think of assets as tangible items, digital assets should be included in your estate plan. Digital assets can include:
- Blogs or websites that generate income
- Digital trademarks or copyrights
- Online financial accounts
- Digital media that generate income such as photos or videos or articles
- Virtual currencies
- Social media accounts
- Rewards from credit cards
All states may not have laws governing digital estate planning because it’s relatively new, so it’s vital to enlist the services of a legal professional when including this in your estate plan. Particularly for those who are or were in the military, electronic media is a very popular method for remaining in contact with family, friends, and loved ones.