Most adults feel that estate planning is important, but few do it. According to a recent survey, the number of adults with estate plans has decreased by 25% since 2017. Additionally, less than half of people making $80,000 or more have started the estate planning process. Without a plan, it could take up to two years to sort through the assets for distribution. A comprehensive estate plan also helps keep legal fees down and protects the family’s financial interests.
Estate plan basics
There are several different elements to keep in mind when estate planning. An experienced estate lawyer will help build a comprehensive plan that includes:
- A will that names guardians for any children: An established guardian provides a residence, health care and makes legal decisions on behalf of the children.
- Designated beneficiaries of life insurance policies, IRAs and 401(k) plans: Without designating specific beneficiaries, benefits can get caught up in litigation and drive up legal fees.
- Trust accounts for those beneficiaries: This further protects assets from legal action and provides tax benefits to the trustees.
- A living will or durable power of attorney: This designates a specific person to make health care or property-related decisions in the event an individual is unable to do so.
- A named executor of the estate: An executor is an authorized manager of the estate who pays off debts and collects and distributes property according to the will.
- Funeral arrangements: Putting funeral wishes in writing prevents potential disagreements between grieving family members and saves money by establishing costs.
Keep the family involved
It is often best to keep family members involved in the estate planning process. Simply knowing that a plan is in place can provide considerable reassurance. Additionally, a lawyer can help manage the necessary paperwork, allowing grieving families to focus on each other. Planning with a lawyer can minimize financial risk and help make a difficult process a bit easier.
Planning for death is never easy. Nearly 20% of adults surveyed will not even act beyond discussing estate planning with their spouses, while 30% believe that they do not even possess enough assets to merit an estate plan. Those facing these difficult questions should consider contacting an estate attorney here in San Jose.