Choosing to create an estate plan is one of the best things you can do for yourself and your family, especially if you are a baby boomer approaching retirement age. Without an estate plan you leave many of your life’s most important decisions without clear answers or guidance. Once you are gone, your family will be forced to deal with these questions without your help, a situation that can often lead to family conflict.
But knowing that you should create an estate plan and understanding exactly what you will be creating are two different things. For many people new to the estate planning process, it can be a great benefit to first provide some basic knowledge that you will need as you go about the process. Educating yourself is important, and coming to your first estate planning meeting with some idea about what will take place will make you feel much more comfortable with your plan, your attorney, and the steps you will take in the future.
Question 1. What is estate planning?
You have an estate whether you realize it or not. An estate is simply a collection of all the property you own. If you die, or become incapacitated, it will fall to someone else to manage that property. This is what estate planning is all about. Preparing for the transfer of your estate to new owners, or for the management of your estate while you are incapacitated, is what you do when you create your estate plan.
Question 2. Who needs an estate plan?
Every capable adult. As soon as you turn 18, even though you may not own much property, you need an estate plan. As you get older and acquire more things, your need for an estate plan only grows.
But regardless of your age, there are certain decisions that only you as an adult get to make. For example, only you can decide the kind of medical treatment you do or do not wish to receive. When you create an estate plan you will create tools that ensure your wishes are honored should you become incapacitated. If you don’t make a plan, you leave it to someone else to make those choices for you.
Question 3. If I don’t have an estate plan, who makes my estate planning decisions?
That depends on your circumstances. For example, if you are incapacitated, someone will have to make decisions about medical choices for you. That person could be your wife, your parents, or even your adult children. In other situations, you might want to leave your property to someone after you die, but if you don’t make an estate plan, the laws of the state of New York direct who will inherit it.
- How Estate Planning for a Family May Trap the Unwary Practitioner - August 31, 2022
- State Income Taxation of Social Security Benefits - August 24, 2022
- Understanding Tax Apportionment Clauses - August 17, 2022