The estate planning process involves a number of uncomfortable topics, but it’s important to make sure you are prepared for the difficult matters involved. The following are seven of the most important questions to ask during the estate planning process.
1. How Will My Assets Be Distributed/Passed On?
The first question has perhaps the widest breadth: how will your assets be distributed after you pass away? It’s important to have some vehicle for outlining how your property, funds, and other assets will be distributed among your heirs, whether they’ll all be passed on to a spouse or divided up among descendants.
2. Have I Accounted For Joint Ownership?
Passing on your legacy can be complicated if some assets are held jointly between you and a spouse. It’s common to leave property to a surviving spouse, but that’s assuming your current family situation is fairly straightforward. If you have any properties jointly owned with others—such as from a previous marriage that hasn’t been completely finalized—it could muddy the waters a bit.
3. Who Will Handle Everything If I Fall Ill?
A living will is just as important as a last will and testament since it outlines your wishes for medical care, who will handle your finances, and whom you trust to make decisions on your behalf. Make sure you name someone you trust to handle these issues with absolute integrity.
4. Are There Any Relatives That Haven’t Been Accounted For?
Sometimes this question can be a bit uncomfortable, but getting it out of the way now can prevent messy issues with your estate afterward. Make sure all descendants, exes, and others who may have a claim on your estate are accounted for when creating estate documents, naming heirs, and so forth.
5. Have I Made Any Large Gifts?
Gifts over a certain amount may need to be reported to the federal government. As of 2020, any gifts over $15,000 per year are subject to gift taxes. A lifetime limit also applies, though most people never actually reach it. Nevertheless, it’s worth taking into account if you have a large estate.
Even if the gifts aren’t actually taxable, they may still need to be reported in order to minimize the tax burden of your estate.
6. Who Will Care For My Children?
If you currently have children or other dependents living at home, it’s important to determine who will take care of them if you should pass on. Guardianship is an important matter that you may not want to think about, but it’s still an important part of the estate planning process for many people.
7. Are There Any Assets That Aren’t In The Will?
Finally, make sure you have a complete list of all assets, including banking and savings accounts, retirement accounts, stocks, bonds, real estate, insurance policies, and so forth. Not only do you need to make sure these assets are all accounted for, but you also need to have the right people named as beneficiaries. Otherwise, something may be left hanging after you pass on.
The answers to these questions should help you avoid pitfalls in your estate planning. An attorney can also play a vital role in helping you navigate the process successfully.