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Two key estate planning considerations to keep in mind

On Behalf of | Jan 4, 2022 | Estate Planning |

Life has its share of uncertainties. Everyone desires to live a long, happy life. However, the tough reality is that death can strike at the least expected time. And while you may not have the power to stop death from coming, but you do have the power to decide what will become of your earthly possessions when you are dead or incapacitated. 

An estate plan is crucial if you hope to have a voice with respect to how your estate (your money, personal possessions and other assets) are distributed when you pass on. Even if you do not own much, it is important that you create a roadmap that outlines who will inherit your possessions. 

But, how do you ensure that your estate plan is properly created? Here are a few considerations that you need to keep in mind:

The needs your heirs may have in the future

Before getting down to the estate plan creation process, it is important that you identify who your beneficiaries will be. Identify who will inherit your insurance policy, retirement account, 401(K)s and other assets. 

Some of the factors you may take into consideration when making this decision include each beneficiary’s present and future financial needs as well as their spending habits. If you have young children, you may consider setting up a trust for them. 

How taxes will affect your estate

Property taxes, estate taxes and gift taxes can all impact the value of your estate. It is important that you gain a sound understanding of how these taxes will affect the future value of our assets

While some assets can be liquidated without negative tax implications, others cannot. Again, you can protect some of your assets from taxation through a trust – but you may want to carefully discuss your goals with a financial planner.

An estate plan gives you peace of mind knowing that your legacy and loved ones’ future are secured. However, you need to keep these considerations in mind during the estate plan creation process to ensure its efficiency.