QUESTIONS ABOUT FINANCE
By Taylor J. Kovar, CEO – Kovar Capital
–Hey Taylor – My husband and I both turned 40 recently, and that sent us into a panic about our estate planning (or lack thereof). We’ve essentially done nothing and are wondering where to start. Any advice would be greatly appreciated. – Jessica
–Hey Jessica – First off, you’re in good company. Most people your age haven’t started estate planning, and a good chunk of them don’t even know what it is. It’s definitely worth doing now – the earlier you start the better, and the more peace of mind you’ll have. When you finally decide that it is time to make your estate plan you will have to schedule a meeting with an estate planning attorney. There will come a point when the conversation with your estate planning attorney may get uncomfortable or personal and you feel that you should not reveal everything and hold some information back. Deciding to hold back information could jeopardize your the plan for your estate though. Estate planning is the process of managing and parceling out an estate to reduce the taxes owed and to transfer assets to beneficiaries after someone dies. The goal being that all of your financial wishes are met upon your death and are not determined by a court. You plan your estate through legal entities like trusts, wills, powers of attorney, health care surrogacies, etc. These are critical legal tools that will help your spouse and your family after you die and avoid having your estate go into probate and be settled by a judge. When you begin to make a plan, you will want to go through an attorney to make sure that all of the requirements are in order for your final wishes to be carried out appropriately as per the Law Offices of Boyd & Boyd, P.C. in your particular state. There are some things you can do to prepare to meet with your estate planning attorney. The first of these is to get your documents in order. Your estate plan is only as good as how much you share with your estate planning attorney. This means that your attorney can only make a plan with the information they are given. The attorney makes the plan for your estate based on the goals of the client and the facts the client chooses to share. If there are goals that the client has for their plan, but refuses to share then the attorney might not be able to make a plan to achieve those goals. More often there are facts the client will hold back out of fear of shame or discomfort that can dramatically alter the plan.
Family problems or personal problems of potential heirs must be shared with the estate attorney to make sure the best estate plan is made. If a child has an addiction problem, it may not be something you want to share with everyone, but it is something that must be shared with an estate planning attorney to protect that child’s potential inheritance and their well being. For the inheritance cases, you must contact with Inheritance law for better understanding of the case. You will want the names and addresses of all parties that are associated with your assets. Bank account information, pension and retirement plans, insurance information, household inventory lists, debt list, etc. are all things you will want to bring to a meeting with your estate planning attorney. Estate planning attorneys are most likely going to rely on information that is provided to them by the client in making an plan, and not do any independent investigation of the facts. The attorney is held to a strict standard of confidentiality once the attorney client relationship begins. This means that the attorney cannot reveal any confidential information that you choose to share with them. Deep dark family secrets and concerns that may be inappropriate to discuss with family members or the general public are held between the attorney and the client and this information remains confidential even after you die. With this standard in place there is no reason to be concerned about sharing and bearing all with your attorney. They have heard it all and should not be too shocked. It is best to be straight forward and honest with the estate attorney to make sure that there are no problems down the road. You want to provide as much information as possible so they can prepare your estate plan as well as possible. When seeking out an estate attorney, there are some things you will want to ask. You will need to know how much they charge for their services, how best to reduce your tax requirement after death, are there any apparent problems with your wishes, are arrangements in order for children, and how often should my will be updated? These are all things you will want to cover initially before beginning your plan. When most people think of estate planning, they think of making a will. It is true, of course, that planning attorneys assist with the creation of a valid will that will stand up in court and that will prevent your heirs from fighting over your assets and possessions at the time of your death. However, estate attorneys do much more than simply help you to draft a will. Estate planning attorneys can recommend comprehensive strategies to help you to protect your assets and your wealth not only from being subject to high estate taxes but also from being lost if you become ill or incapacitated. Estate planning attorneys can do this by helping you to create trusts to protect your assets, or by helping you to make appropriate plans for long-term care insurance.
Before diving all the way in, I recommend getting life insurance. I think 20-year term life insurance plans work best, as they’re affordable and easy to get. This plan won’t fund your inheritance, but it will provide for your dependents. A term worth somewhere around $500,000 should work, but the amount is something you and your husband can discuss.
After that, it’s time to think about the nitty gritty of your estate. If you want to get started on a last will and testament, it’s nice to get some of those details squared away. It doesn’t feel very pressing at 40, but there’s never a particularly convenient time to do a thorough inventory of your assets; to do this you will need to contact a firm that specializes in probate law services . Wills change all the time and it’s much easier to edit this document in the future than it is to put it together the first time.
The will is what most people think of when imagining estate planning, but it often isn’t the most important part. Just as important, especially when you’re in good health and not expecting an estate transfer any time soon, is a durable power of attorney. You can give authority and responsibility to the person you and your husband trust most, ensuring that decisions will be made as you see fit if something should happen to you. By stating unequivocally who you want in charge of your estate, people will have less room to raise legal questions about what you would have wanted after you pass, for this, we recommend getting help from an estate planning attorney.
You may also want to establish a healthcare proxy to make your medical decisions in the event that an accident or condition renders you unable to make those choices for yourself. This is another way to make sure someone you trust is in charge of making decisions when you cannot.
It isn’t fun to think about estate planning, but it’s a huge blessing to have the work done and remove the anxiety of not knowing. Start with life insurance and then think about sitting down with an attorney to learn more about your options. Wishing you and your family all the best, Jessica!
