An estate plan is not just for high-net-worth individuals, it’s for everyone who is single, has a spouse, has a partner, has dependents, owns a business, has investments, has retirement funds, owns property, or has material possessions of value such as a car. An estate plan may reduce estate taxes and shield your beneficiaries from having to go through probate. It means your last wishes will be heard. You can name a guardian for any young children and can even direct how you wish a beloved pet to be cared for after you are gone. Having an estate plan can also prevent a mess by bringing clarity to your beneficiaries, and it can protect assets from unforeseen creditors.(1)
The estate plan(2) may contain a will or living trust, the names of your beneficiaries, the appointment of an executor, a letter of intent that tells a beneficiary or executor what you wish to be done with specific assets, funeral details, and special requests. It should contain a healthcare directive with a power of attorney appointing a trusted person to make medical decisions for you when you can no longer voice your opinion, and a durable power of attorney appointing a trusted friend or relative to make financial and legal decisions for you, if you become incapacitated. It may also contain a trust or trusts for passing on assets to your beneficiaries. Life insurance can be an important component in the overall estate plan.
You should update your estate plan whenever a major change occurs in your life, such as purchasing a home, moving in with a significant other, getting married, having or adopting a baby, selling your business, getting a divorce, retiring, or having a beneficiary die before you do. Review your plan when federal and state laws on estate taxes change.
If you should die without a will (which is called “intestate”), (3) the state and federal governments will have standard procedures for distributing your assets, and they may not be in line with your wishes. Your beneficiaries may have to pay more in estate taxes, and probate may take considerably longer than it would if you had a will in place.
Consult a professional financial advisor on tax and estate planning. Trusts can be complicated to set up, so consult a professional trusts and estates attorney or certified public account before you begin.
This educational third-party article is provided as a courtesy by Anthony E. Marlin, Agent, New York Life Insurance Company and a Registered Representative of NYLIFE Securities LLC (member FINRA, SIPC), a Licensed Insurance Agency and New York Life Company,Marlin & Associates Financial Services, 100 East Jackson, Paulding, Ohio 45879. To learn more about the information or topics discussed, please contact Anthony E. Marlin at 260-704-3272.
(1) Julie Garber, “5 Reasons You Need an Estate Plan,” The Balance.com, Updated November 3, 2021.
(2) Glenn Curtis, “6 Estate Planning Must-Haves,” Investopedia.com, Updated February 27, 2022.
(3) Julia Kagan, “Intestate,” Investopedia.com, Updated November 23, 2022.
