New Year, New Strategy: Begin Estate Planning for Every Stage of 2021
Are you planning your estate for 2021?
2020 certainly was an unusual year. With the start of the pandemic, many people needed to make changes to their lives that led to uncertainty about the future. People began thinking about what is really important to them and about what would happen to their estates.
If this sounds like you, you might be wondering how you can start estate planning in a way that fits your needs. Will estate planning in 2021 be any different?
Keep reading to learn more!
What Is Estate Planning?
Before we go into how to structure an estate plan in 2021, let's define estate planning in general.
Estate planning is the process of plotting out how your assets will transfer to your beneficiaries upon your death. Having an estate plan ensures everyone you love will be taken care of and smooths over disagreements over who gets what.
Often, people conflate estate planning with having a will. People establish their wills in order to state which portions of their property they wish to give to each person in their family. As such, having a will is a key part of estate planning, but it isn't the only portion worthy of consideration, especially considering a Will has to go through probate to be effective.
Whether you have a lot of assets or a little, if you want to control who gets what, who is in control of dividing your estate and avoid the probate process – a full estate plan including a trust is necessary.
Estate Planning in 2021
But how should you go about estate planning in 2021? And how do you know if you need an estate plan, or if just a Will should suffice?
There are several factors to consider. Let's get into them below.
The Extent of Your Assets
Simply put, the more assets you have, the more likely you are to need an estate plan.
Many people have more assets than they realize. Your assets may include tangible items, such as a house, car, or other valuable possessions. Your intangible assets may consist of your checking and savings accounts, life insurance, pension and 401(k).
To get help with your estate planning, we suggest giving our estate planning attorney services a call.
Consider Your Familial Needs
Next, think about what your family needs in order to be cared for if you pass away.
If you don't have life insurance already, consider getting it. This will ensure your family receives a sum of money after you die, which will help them get by. Should you have children, specify which adults will care for them should you and your partner both pass.
You can also set them up with a trust. Trusts designate portions of your estate to go toward certain things while you're alive, and the named beneficiaries inherit the trust after you die. You can also control how soon your beneficiaries receive their share of your estate. Give a 22 year old $100,000 and they probably buy a Ferrari. Give them smaller amounts over time and hopefully they pay down student loan, make a down payment on a house and/or buy a more reasonable vehicle.
Do You Need Estate Planning?
You might be wondering whether or not you need estate planning. After all, only about 32% of Americans possess an estate planning document, such as a Will.
All households should be prepared for when disaster strikes. As a result, it's wise to take an account of all of your assets and family needs and come up with a plan.
Do You Want Estate Planning Help?
Are you in need of estate planning assistance?
For many families, estate planning can be very detailed. Yet, because an estate plan helps ensure the security of your loved ones upon your passing, it is essential to have something in place.
If you want help with your estate planning, contact us! We'll assist you with getting everything in legal order.