For most people, the idea of creating an estate plan is not particularly appealing. Some feel it’s morbid to think about what will happen after you die or become incapacitated. And developing a plan for your “estate” can sound like it’s for the ultra-wealthy only.
The truth is that estate planning is important for everyone, and the best time to create your plan is now: long before you need it.
Drafting a Legal Will
Most financial advisors and attorneys will tell you the best time to create your will is the moment you become a legal adult. That’s because once you reach adulthood, you’re legally able to open savings accounts and purchase assets in your own name.
If you die without a valid will, the management of any real estate, money, or other assets you have would follow the interstate provisions of the probate statute. This often leaves assets to individuals other than your desired beneficiaries.
A judge would appoint a representative to oversee the administration of your estate, which means there’s no guarantee they’ll handle things the way you want. You can avoid this outcome by stating your wishes explicitly in your will.
In some cases, people become ill or incapacitated in such a way that they can’t make important decisions for themselves. This can leave family members at a loss when they’re asked to make medical decisions on behalf of their loved ones or find out they don’t have the authority to make those choices in the first place.
You can make your wishes known ahead of time and reduce the burden on your loved ones by creating a living will and designating who should receive power of attorney if you can’t make decisions on your own. It’s a good idea to begin this process as soon as you reach legal adulthood.
Establishing a Trust
A trust is a legal document that holds certain assets or property “in trust” for a specific beneficiary or group of beneficiaries. Trusts allow you to maintain better control over your assets both while you’re alive and after you pass. Assets held in trust may also be exempt from certain legal or tax requirements that would apply to assets named in a will.
Establishing a trust isn’t strictly necessary, so it’s difficult to say when to create one. However, if you have valuable or extensive assets, it’s a good idea to consider putting them in a trust.
Nominating a Guardian
If you have or are preparing to have children, nominating a legal guardian is essential. An appointed guardian can accept responsibility for the care of your children if you die or become incapacitated and can’t care for them yourself.
In most cases, you can name a guardian when you create your will, but you can also prepare a separate nomination of guardian documents for the same purpose.
Updating Your Estate Plan
Keep in mind that your estate plan should be updated periodically as your assets, family, and goals change. Most experts suggest reviewing and updating your estate plan every three to five years and when any of the following occur:
- Marriage, divorce, or remarriage
- The birth of a child or grandchild
- Purchasing a home or other property
- Inheriting money or assets
- Moving out of state
- Traveling abroad
Contact an Estate Planning Attorney Today
Ensure your loved ones understand your end-of-life preferences and receive everything you want them to have after you die by developing a comprehensive estate plan. Contact the North Carolina estate planning attorneys Mullen Holland & Cooper P.A. today for an initial case review.