Estate planning is one of the most important things older adults can do to secure their legacies.
An estate plan, however, is not a one-time affair. Plans need periodic revisions and management, especially after significant events, such as retirement or the birth of a grandchild.
Did you know every October, the National Association of Estate Planners & Councils hosts an estate planning awareness week to promote the importance of a sound plan? One of the main reasons why, which should raise concern for all of us, is the statistic that roughly 56 percent of Americans today do not have a plan at all.
One of the goals for this week is to educate the public about estate planning facts that are not commonly known.
Let us share five such things with you right here in our blog.
1. Wills have limits. A will is perhaps the most common, and well known, component of an estate plan. It can define how your belongings should be distributed after death. A will, however, has no controlling authority to manage your assets during a lifetime crisis, whereas, a trust agreement could.
2. Estate planning involves health care. A solid plan should include more than just financial considerations. A health care advance directive, for example, would allow a trusted loved one to make health care choices for you if you become incapacitated. Further, a Florida living will, could provide instructions regarding end-of-life care.
3. You can change your mind. An estate plan is not set in stone. It can be revisited and modified, or rewritten, at any time. The process for doing so, however, involves specific procedures that must be followed to ensure the changes are legally binding.
4. Gift your money to lower tax liabilities. If you are worried about estate taxes, you can start gifting from your estate now. The IRS allows individuals to give annual amount to others without taxes each year. The gift money is tax-free for the recipients, and would have the added benefit of lowering the overall value of your estate and thereby reducing applicable estate taxes. Keep in mind, there is a balance, as these lifetime gifts could disqualify you from receiving public benefits such as Medicaid in the future.
5. Do not wait. If you do not have an estate plan, there is no guarantee your property can be distributed as intended. The same applies for an out-of-date plan.
There is never a wrong time to plan forward when it comes to protecting yourself and your loved ones. We encourage you to ask us your questions about what type of planning is right for you now, and in the future.