As we roll over into the New Year, most people will take some time to reflect on the future and set some goals and priorities for themselves.
While estate planning might not immediately come to mind as an important “to-do” item for 2022, it should be on your list. Specifically, here are four estate planning tasks that you should do now.
1 - Estate Planning For Your Children
As parents or guardians, one of our top priorities should be protecting and providing for our children. While we all plan to be around to do that ourselves, it is prudent to make provisions for their future - just in case. Estate planning is key because it allows parents to name one or more guardians who can take over the care of their children in the event of a death. This is a much better scenario than leaving the decision up to a probate court or some other government entity. Estate planning also allows the opportunity to allocate assets, like home equity or life insurance proceeds to your children, ensuring that they have some future support financially as well.
2 - Make End of Life Decisions
When a loved one becomes incapacitated or dies suddenly, often there are a lot of really tough decisions that have to be made by the surviving family. Things like whether to maintain life support or not, organ donation options, burial arrangements, etc. Many people struggle with these things, largely because they don’t know what the person would have wanted them to do. Estate planning can help ease this stress significantly by outlining your wishes on some of the more common questions that could arise in a worst-case scenario.
3 - Make Adjustments to Reduce Tax Liabilities
Dealing with the death of a close family member is tough, and the last thing on most people’s minds during this time is tax planning. However, inheritance taxes can be major liabilities and create extreme stress in an already trying situation. Estate planning can help minimize this by giving you the opportunity to allocate assets in such a way that minimizes the tax burden. While it is unlikely that your family will not have to pay any taxes, a little proactive planning can save a lot of potential tax problems in the long run.
4 - Make a List of Who Gets What
Most people probably have some idea of what they want to happen to certain assets after they are gone. There may be a plan for a daughter to have great Nana’s dishes and for a son to keep great Grandpa’s tool chest. But in the event of a death, sometimes these wishes aren’t clearly outlined. Estate planning allows you to create a list of important things and who will be the benefactor of these. This ensures that valuable items aren’t discarded or sold unknowingly, and also reduces the likelihood of family fights over what remains of an estate.
Don’t Procrastinate Estate Planning
Much like obtaining an insurance policy, estate planning does no one any good after the fact. In order to ensure that your young children, spouse, and close family members are provided for, make estate planning a priority now. If you already have a plan in place, take time at the beginning of each year to review it for accuracy and make any updates or changes that you deem appropriate.
At CleveDoesMore, the best part of our job is helping people make informed choices to minimize their risk while building equity and wealth for their future.