Many people understand that having a good estate plan is key as they age. If you're ready to create an estate plan, there are many factors to consider. Here are five things to remember when you create your estate plan.
1. Remember a will
One of the first things you can do as you age is to create a will. A will is the most basic of all estate plans. It includes information on your wishes after you pass away, and it gives instructions on how to handle your estate. Without a will, your estate is bound by state law, leaving your dependents and spouse to work it out in court.
2. Recognize tax liability
When you have an estate, it is often a tax liability. Whoever receives assets from the estate may have taxes to pay. Consider this ahead of time, so you can work out the amount to put aside for estate taxes, or work with your attorney to create trusts or find ways to reduce the total tax liability in the future.
3. Make plans for children with disabilities
If you have an adult dependent or child with disabilities, use your estate plan to give information on guardianship of this dependent after your death. You may also create a trust and place assets in it for your child or dependent to use in the future.
4. Make plans for your pets
Fluffy and Fido are family, and it's important to provide for them in the case of your death. Create a pet trust with funds or assets for your pets, and establish a guardian for your pets in the case of your untimely death. You'll rest easy knowing your pet has a place to go if you cannot be there yourself. Better yet, the trust is enforceable by law, so your pet is protected.
5. Create your plan while mentally competent
One important tip for anyone getting older is that you need to create your will and estate plan when you are in the right mind to do so. As you age, you risk developing diseases that mark you as mentally incompetent, which opens your estate up to claims from others. Others may decide that decisions you made while in an incompetent state should not be upheld, and the court could agree depending on the situation.
To avoid this, create your estate plan early in life and update it as needed. Your attorney updates the forms and you may choose to have at least one witness sign them as well for added security.
These are just a few tips for taking care of you r estate. Keep them in mind when you begin.