Most people acknowledge that having an estate plan in place is important. Despite that acknowledgment, many Americans do not have an estate plan. One reason often given for this apparent contradiction is that the prospect of creating an estate plan can be an intimidating one. Everything from the overall goals you should include in a plan to the documents used in an estate plan are frequently unfamiliar. To help get you started with your estate plan, the Indianapolis estate planning attorneys at Frank & Kraft explain some common estate planning steps.
- Consider your goals. Ensuring that you do not leave behind an intestate estate may be your primary estate planning goal; however, you will likely have related objectives you wish to achieve with your plan as well, such as incapacity planning, asset protection, or protecting the inheritance of a minor child.
- Create a list of your assets and liabilities. You undoubtedly have a pretty good idea of your net worth; however, when you start focusing on the details of your estate plan, you will need details relating to your assets and liabilities. The easiest way to handle this is to make two lists – one for assets and one for liabilities. Include as much information as possible in each entry so your Executor can use the lists as well when the time comes to probate your estate.
- Really think about your beneficiaries. Your primary beneficiaries are easy – spouse, children, family, and friends; however, you may also want to add a charity or even your family pet once you really think about it. Also, start thinking about specific bequests you wish to make, such as leaving family heirlooms to specific children.
- Take the time to pick the best fiduciaries. Do not make the common mistake of appointing fiduciaries, such as your Executor or a Trustee, based solely on the fact that they are a family member or friend. Instead, take the time to really consider who is right for the position.
- Protect your minor child’s inheritance. If you are a parent, keep in mind that your minor child cannot inherit directly from your estate. It is crucial that you include tools, such as a trust, to protect your child’s estate until he/she reaches the age of majority.
- Make sure you understand the probate process. Probate is the legal process typically required after someone dies. Probate can be costly, both in terms of time and money. Fortunately, there are several tools and strategies that you may be able to use to help your estate avoid probate. The key is to limit your probate assets because not all assets are required to go through probate. Commonly used assets that bypass the probate process (non-probate assets) include:
- Assets held in a trust
- Certain types of jointly held property
- Proceeds of a life insurance policy
- Assets held in an account designated as “payable on death (POD)” or “transfer on death (TOD)”
- Most retirement and pension accounts
- Think about what would happen if you become incapacitated in the future. A comprehensive plan will also contemplate, and plan for, the possibility of your incapacity. Whom do you want to take over your assets and make decisions for you in the event you are incapacitated at some point in the future?
- Consult with an experienced estate planning attorney. Once you are ready to sit down and put your estate plan together, you need to consult with an experienced estate planning attorney. Do not make the mistake of trying to DIY your estate plan. The DIY forms you find on the internet will almost always create problems for your loved ones when it comes time to probate your estate. The relatively small amount of money you save now could end up costing your loved ones a small fortune in legal fees down the road.
Contact Indianapolis Estate Planning Attorneys
For more information, please join us for an upcoming FREE seminar. If you have additional questions about estate planning, or you are ready to get your estate plan started, contact the experienced Indianapolis estate planning attorneys at Frank & Kraft by calling (317) 684-1100 to schedule an appointment.