When Should You Start Planning Your Estate?
Whether you are a young adult or an older person, it is important to start estate planning as soon as possible. The longer you wait, the harder it will be to ensure that your wishes are carried out after your death. You never know when something unexpected could happen, and having a plan in place for your estate can help give you peace of mind.
Here are a few signs that it is time to get started.
When You Have Children
If you have children, estate planning is especially important. Without an up-to-date plan in place, your children could end up being wards of the court after your death. This means that a judge will determine their guardianship, and not necessarily in the way that you would have wanted.
To avoid this, create a plan to ensure your children are provided for in the event of your death or incapacity. Even if you do not have extensive financial resources, a simple plan that outlines your wishes and appoints guardians for any minors will provide peace of mind for you and your family.
Once you establish guardianship and create a trust for your children, you can ensure that your wishes will be respected after you are gone.
In addition, a comprehensive estate plan can help protect against potential future legal disputes among family members. You can outline how assets should be divided and who is responsible for what to minimize disagreements that may arise after you have passed away.
Doing this allows your wishes to be legally binding and prevents the court from making decisions about the distribution of assets on your behalf.
When You Receive a Significant Inheritance
Estate planning is absolutely essential for anyone who has received a significant inheritance. Without planning, you may be unable to protect your legacy from tax liabilities, creditors, and even lawsuits. You need to understand the various aspects of estate planning and how they affect your particular situation to ensure that your heirs will receive their intended inheritance as smoothly as possible.
The types of estate planning techniques you need to consider largely depend on the size of your inheritance. If it is relatively small, then basic documentation such as a will or trust may suffice. However, if the inheritance amount is large, there are more sophisticated tools available that could help reduce tax liability or prevent creditors from making claims against the inherited assets.
For example, setting up an irrevocable trust allows you to avoid probate courts entirely by transferring ownership of assets into the trust to protect them from taxes and creditors while still being able to specify exactly how assets should be distributed when you pass away.
If you've received an inheritance, starting an effective estate plan can protect you and your heirs from future financial headaches. Appropriate considerations have to be taken with regard to taxes and potential legal issues, as well as ensuring that any sentimental objects remain with family members as desired.
Estate planning is not only a wise move. It can be a very rewarding process providing peace of mind now and for generations to come.
To get started, contact an estate litigation attorney in your area.