Legal How-To: Deciding Which Estate Planning Tool(s) to Use
Estate planning is complicated by the fact that every person (1) is mortal and (2) has his or her own arrangement of property, relationships, and assets.
And until this whole ephemeral nature of the human condition problem is solved, it’s a bit easier to focus on the latter complication — sizing up your own situation and deciding which legal instruments are best (wills, trusts, etc.)
When deciding how legally protect your estate, start by considering the following:
1. The Value of Your Estate.
We know it sounds crass, but if your estate is worth less than a certain amount, then there’s very little benefit to having an overly complicated estate plan. For purposes of state and federal estate taxes, any estate that is valued less than $500,000 is likely to be exempt from estate or inheritance taxes.
In fact, if your combined estate is valued at $100,000 or less, it’s unlikely that your heirs will even have to pay for probate. With very few tax detriments or probate costs for low-value estates, the easiest solution may just be a simple will. The more valuable assets you leave behind, the more you may need to explore other options.
2. Your Relationship Status.
Making estate plans means looking ahead, but it also means taking stock of your life as it is now. If you’re single, you won’t be as likely to look into trusts to care for your surviving children or grandchildren. You can still set up a trust for your pets, one to provide for your elderly or ailing parents, or even a special needs trust for a disabled beneficiary.
You’re allowed and encouraged to make changes to your estate plan as your life changes (with marriage, kids, etc.), and you want your current plan to provide for your loved ones even if you died tomorrow.
3. Your Real Estate and Business Assets.
The more real estate and business assets you own, the more legal help you may need to square away your estate. You don’t need to wait until you die to place any houses, businesses, and other high-value assets in the legal care of a living trust. When combined with a pour-over will, placing most of your assets in trust may help simplify how your major investments are managed even after your death.
Need More Help?
Of course this is just a general overview; there are many more estate-planning tools available such as powers of attorney, health care directives, and others. An estate planning attorney at Goldfinch Winslow can help you decide which tools are best for you — at any point in your life. Contact us today!
- 3 Estate Planning Documents You Probably Need (FindLaw’s Law and Daily Life)
- 5 Things an Estate Planning Lawyer Can Do (That You Probably Can’t) (FindLaw’s Law and Daily Life)