Estate planning may appear to be something you can put off until later, but life can be unpredictable. Preserving your assets is something you should not put off. Estate planning is the process of deciding who will inherit your assets and take care of your obligations when you die or in the event you become incapacitated. Below, the estate planning attorneys at Rodier Family Law discuss seven ways to get a head start on the estate planning process.

Take Inventory of What You Own

Both the tangible and intangible assets you own should be considered when developing an estate plan. Tangible assets are physical possessions such as real estate or land, vehicles, keepsakes, collector’s items, jewelry and other valuables. Intangible assets, which are nonphysical assets, include your various bank accounts, stocks and bonds, life insurance policies, retirement plans, health savings accounts, digital assets and more.

If you are a business owner, your intangible assets may also include the ownership of your business. Following the inventory of your assets, determine how you would like to distribute them. Some assets may be more valuable than others, and you may choose to place them in the hands of someone you trust to look after them.

Consider Your Family’s Needs

When deciding on a life insurance policy, make sure you put into consideration the financial stability your family may need following your death. If you have children, you need to consider both their financial needs and their guardianship. Naming a guardian will help you avoid expensive family court battles that could deplete your estate’s assets.

Determine Your Directives

Important legal directives are included in a comprehensive estate plan. These include a trust, medical care directive, financial power of attorney and a limited power of attorney. Ensure that your directives are determined as you plan your estate. Learn more about these directives here.

Assess Your Beneficiaries

While your will may state your preferences in detail, they may not be comprehensive. Examine your 401(k), as well as your insurance. Beneficiary designations are common in retirement plans and insurance policies, so you need to maintain them and make changes as needed. Beneficiary designations may take precedence over what is written in a will.

Over time, circumstances may change and you want to ensure that your assets will be distributed to the right people. This is why you should confirm and update your beneficiaries. Make sure you fill in all of the beneficiary fields. When an account goes through probate, the property may be allocated according to the state’s guidelines.

It is also important to designate alternate beneficiaries, if possible. If your designated beneficiary dies before you do and you fail to update the primary beneficiary designation, you will want to have a backup that you can trust.

Understand Your State’s Estate Tax Laws

Large estates are liable to estate taxes at the federal level. If your estate is greater than the federal tax exemption limits, consider a grantor retained annuity trust, or GRAT, which is an immutable trust that can help you save money.

Estate taxes are imposed in Maryland and the exclusion amount is $5 million. This means that the state may impose an inheritance tax on estates worth less than the federal exemption level. Inheritance taxes exist in Maryland, which means that the individuals who inherit your money may be required to pay taxes on it.

Make A Plan to Re-Evaluate

When your circumstances change, whether they are good or bad, it’s important to reassess your situation as well as your estate plan. Even if your circumstances do not change, you should review your estate plan on a regular basis to ensure that your assets will be distributed to the right beneficiaries.

Contact an Estate Planning Attorney at Rodier Family Law

Estate planning and will preparation can be complex. However, with the help of an estate planning attorney, it can be a stress-free process. Having experienced legal help by your side to guide you through the wills, trust and estate planning process can empower you to implement a plan that works best for you and for you beneficiaries. Contact the Harford County legal team at Rodier Family Law to see how we can assist you. Unlike other matters handled by our office, we charge a flat fee for the drafting of Wills and related estate planning documents. Call (410) 803-1839 to get in contact with an attorney.