Some assume that estate planning is a process that only needs to be completed by those with a certain number of, or with many high-value, assets. This is untrue: everyone can benefit from enlisting a professional or attorney to build their estate planning strategy.
Planning how your estate will be distributed after you are no longer here can give you peace of mind that your family will be cared for even in a time of great grief and distress. Whether it be dealing with the clerk of court, understanding tax implications, or reducing any potential issues that could lead to probate disputes, there are many benefits to building your estate planning strategy.
What is an Estate Planning Strategy?
Estate planning is the process of managing and designating who receives a person's assets in the event of one’s death or incapacitation. Creating your estate planning strategy usually involves the help of an experienced estate planning and probate lawyer, to ensure that estate taxes, gift taxes, and other tax implications are minimized and managed.
Steps to Your Estate Planning Strategy
Take an Inventory of Your Things
It doesn’t matter how much or how little you have, it is always a good idea to take inventory of your things—both tangible and intangible.
Tangible assets include things like real estate, vehicles, and collectibles. Intangible assets include less concrete things, like checking and savings accounts, stocks, retirement plans, and life insurance policies.
Once you have an inventory, you can start valuing those assets. In some cases that can be done through appraisals, while in others it may be a matter of determining how your heirs will value these things.
Determine Your Family’s Needs
It’s important that you have ways to protect your estate after you are gone and to be sure you have accounted for what your family might need.
This means making sure you have enough life insurance, naming a guardian for your children, and documenting your wishes for the care of your children in writing.
Your estate planning strategy will involve a few directives, which are written and legally-certified instructions about your preferences when you are unable to make decisions for yourself or after you have passed.
Some directives you may have to create include
- A trust. With a trust, you can delegate certain parts of your estate to go toward certain things while you’re alive, and designate a trustee to take over in the event that you are incapacitated.
- A medical care directive. Also known as a living will, this communicates your wishes for your medical care if you are incapacitated.
- A durable financial power of attorney. This designates another party to manage your estate and finances if you are unable to do so.
- A limited power of attorney. This document can limit the powers of the person you name as your representative, which helps you maintain a bit of control.
Determine Your Beneficiaries
While you will map out your beneficiaries in your will, there are some other places you will want to double-check to be sure your wishes are carried out.
Review your retirement plans and insurance policies to be sure the beneficiaries you listed here are still those you wish to leave your estate to. If these differ from that in your will, they can have more sway than the latter in determining who your assets ultimately go to.
You also need to make sure to name backup beneficiaries in the event that the primary individuals listed pass away.
And never leave the beneficiaries section blank, as this results in your estate being distributed according to the state's rules, and can lead to issues in probate court.
Review Estate Taxes in Your State
Developing an estate planning strategy with the help of an attorney is key to understanding how to navigate the estate and inheritance taxes laid out by your state.
Only very large estates are subject to federal estate taxes, but some states have their own estate and inheritance taxes that you—or your beneficiaries—may have to be prepared for.
Final Word: Guide to Building Your Estate Planning Strategy
Developing your estate planning strategy can be overwhelming if you are doing it alone, which is why many decide to enlist the help of an attorney with experience in estate planning and probate processes. If you’re looking for estate planning help in North Carolina, you can turn to Van Camp, Meacham & Newman. Selected as one of the “10 Best Law Firms” in North Carolina for 2018 for Client Satisfaction in the practice area of Estate Planning by The American Institute of Legal Counsel, Van Camp, Meacham & Newman strives to guide you through the process and give you peace of mind.
Schedule your free 30-minute initial consultation with Van Camp, Meacham & Newman today.
Disclaimer: The information seen on this website, including the article above, is not legal advice or legal counsel. If you wish to speak to an estate planning lawyer that serves Raleigh, Fayetteville, Pinehurst, Sanford, and beyond, contact our North Carolina attorneys directly using our online form or by calling 910-295-2525.