It’s not the most fun topic to bring up over a holiday dinner, but the sooner you get started on estate planning, the more beneficial it will be to you and your descendants. It requires a large amount of time and effort, and those who delay doing so will pay the eventual price for their leisure. Your whole life efforts can be lost if you do not properly plan out where you would like your investments, assets, and other financial strengths to go. Here’s a quick look at the importance of estate planning, which is no longer for just the rich, but for all earners who want their assets to go to the intended beneficiaries upon death. While this is hopefully a long way off, those who die without leaving a solid plan for their estate may find their assets going to unintended individuals or the government.
First Breakdown. Some of the steps that you’ll need to take in your estate planning process include determining your beneficiaries, the breakdown of what each will receive, and the ways to do so without paying excess and unnecessary tax obligations. Before doing any of this, however, the first step is assessing your net worth to know how much you even have to distribute. Understanding the basics of how this is done is vital in making sure that your financial goals are carried out, as well as for furthering any philanthropic aims you may have for your assets after you are gone.
Assessing Net Worth. Getting an accurate, or as near to accurate number as possible, for your net worth is an important first step in preparing your estate for a sound financial future. This involves taking stock of all your assets and debts and looking at them holistically to see how much you possess financially. Your assets include investments, cash, retirement accounts, life insurance, real estate or other property, business interest, and personal possessions of value. Debts are then subtracted from the sum of all your assets and the end result is your net worth.
Taxes are also a painfully important part to understand during the estimation of your net worth. Along with your federal taxes, other states have estate and inheritance taxes that will significantly impact what you will be able to give to beneficiaries.
Healthcare Decisions. These are another vital part of preparing for end of life care that goes along with planning for your estate. Using a living will, you will be able to dictate exactly how you would like to be cared for if you’re no longer able to properly express those wishes yourself. Giving a close relative such as a spouse or adult child the power of attorney will enable them to make decisions for you, with the assumption that they would act as you would have wished. Without establishing these wishes yourself in legally protected documentation, the government will use the default legal requirements to make those decisions for you.
Experienced Attorneys are Here to Help: For all matters of estate planning and end of life decisions, having a qualified lawyer on your side will make the whole process smoother for all involved. Each of us at Borrus, Goldin, Foley, Vignuolo, Hyman and Stahl, PC has extensive experience and are here for you. Contact us for a consultation at 732-422-1000 today.