Follow These Steps to Create Your Estate Plan

estate planning stepsEstate planning can seem complicated and overwhelming if you do not know anything about it, and this is understandable. In this post, we will break it down to some easy-to-understand steps to help you get started if you are currently unprepared.

Evaluate Your Assets

It is important to inventory your assets and tally up the value of the resources that you intend to pass along to your loved ones. You should attach a dollar figure to your estate because of potential estate tax exposure.

The federal estate tax comes with an $11.7 million exclusion. This is the amount that you can transfer tax-free before the estate tax could potentially be levied on the remainder.

In Connecticut, we have a state-level estate tax with a $7.1 million exclusion in 2021. If your estate will be exposed, there are steps that you can take to gain estate tax efficiency.

Determine Your Family’s Financial Need

You should have an estate plan in place as soon as you are a responsible adult, and it becomes an absolute must when you have people depending on you. If your income is relied upon, you should make sure that you have an adequate income replacement vehicle in place.

This is typically going to be life insurance, and whole life insurance is affordable for relatively young adults. If you have minor children, you have to address money management on their behalf.

A revocable living trust is a possibility because the trustee that you name would be able to administer the trust on behalf of a child if it becomes necessary. Another option is a testamentary trust, which is a trust that is contained within a simple will.

Even if you have a trust, if you have dependents, you should name a potential guardian for your children in a will.

Consider a Trust

Far too many people automatically assume that a will should be used if you are not a multimillionaire. In reality, a trust can be a far better choice for people of relatively ordinary needs.

The revocable living trust is a very effective and versatile estate planning device that can be the ideal estate plan centerpiece. If you have a living trust, you would act as the trustee while you are living, so you would have access to the assets at all times.

You would name a successor to act as the administrator after your passing. When the time comes, the successor trustee would distribute assets to the beneficiaries in accordance with your wishes outside of probate.

This is a legal process that would be necessary if you state your final wishes in a will. It is problematic because it is time consuming and costly, and probate records are available to anyone that is interested, so there is a loss of privacy.

You can also include asset protection and spending safeguards when you have a living trust. This is one of many different types of trusts that can be used, so you should not automatically assume that you should use a will.

Address the Possibility of Cognitive Impairment

According to the Alzheimer’s Association, 32 percent of the oldest old have contracted the disease. This term is used in the geriatric community to describe people that are 85 years of age and older.

This is not the only cause of cognitive impairment, so you should address the possibility in a clear eyed, proactive manner. If you have a living trust, the person that you name to act as the successor trustee can also be empowered to administer the trust in the event of your incapacity.

For property that is not held by a trust, you can name a decision-maker in a durable power of attorney for property. A durable power of attorney for health care should be added to designate someone to make medical decisions on your behalf.

These would be decisions that are not related to life-support utilization because you can state those preferences in advance in a living will. To give your health care agent the right to access your medical records, you should sign a HIPAA release to complete plan.

Work With an Estate Planning Lawyer!

The last step is to engage an attorney to help you bring your outline to fruition in a legally binding manner. You can schedule a consultation at our estate planning offices in Westport or Glastonbury, CT if you call us at 860-548-1000.

There is also a contact form on this site you can use if you would like to send us a message, and if you reach out electronically, we will get back in touch with you promptly.


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