What is Estate Planning?
Estate planning is the process of analyzing assets to determine what assets flow through your estate, establishing goals for managing your assets during life, determining the desired distribution of your assets upon death, devising a plan for managing wealth during life, minimizing taxes, distributing wealth upon your death, and then drafting legal documents to address potential disability, and to carry out the decisions you made in your plan. And lastly, assessing your insurance needs and making sure you are adequately covered.
Why is Estate Planning Important?
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When should I have a Will?
- If you have accumulated assets and net worth and you care about who receives your assets upon your death.
- If you have minor children and need to designate a guardian for those children upon your death.
- If you are in a second marriage and have children from a first marriage.
- If you have pets or horses and need to provide for their care.
If you are young, have no children, and have no wealth or assets accumulated and would give all your property to your parents upon your death, then it is probably ok if you do not have a Will at this time.
What if I die without a Will?
The state will appoint a personal representative and distribute your assets to your heirs as determined by state law. If you have minor children, the court will determine who should act as guardian of your children and appoint the guardian on your children’s behalf. If you have children and they are over the age of 21 the court will distribute the assets to them outright.
What if I Become Disabled or need Nursing Home Care?
Planning for disability and possible long-term care is part of the estate planning process. Disability planning takes several forms, having documents in place to manage your affairs when you are not able to for yourself and potentially purchasing disability insurance if you are not covered by an employer. Long-term care needs can also be addressed in several manners: purchasing long-term care contracts, or through medical assistance planning if a contract may not be obtained due to health conditions or financial considerations. The earlier you contract for long-term care, the better.