Estate planning, when done properly, is an ongoing process. The plan you create for yourself when you are young and just starting out in the “adult world” will not be the plan you end up with when you reach your retirement years. In the meantime, you will need to revise your plan several times to take into account your growing estate and your growing family. The Grand Forks estate planning attorneys at German Law Group offer some suggestions on how to make an estate plan that takes your family’s needs into account.
Your Basic Estate Plan
Estate planning is a highly individualized process; however, there are some basic estate planning tools and strategies that apply to most estate plans. As such, it is usually wise to start with some of those tools and strategies. Your Last Will and Testament can serve as your primary tool for distributing your estate plan; however, many people choose to use a trust because of the additional benefits a trust offers. Your Will allows you to make general and specific gifts, appoint someone to oversee the administration for your estate, and nominate a Guardian for your minor children if one is ever needed. A trust, however, allows your estate to limit, if not avoid entirely, exposure to the probate process. A trust also lets you stagger the distribution of assets to beneficiaries and can be modified easily throughout the course of your lifetime. If you are the parents of minor children, one of the best reasons to use a trust is the simple fact that your minor children cannot inherit directly from your estate. Instead, someone must manage the inheritance you leave for them until they reach the age of majority. By placing those assets in a trust, you choose who will manage them and the terms under which they are ultimately distributed.
Incorporating Your Family’s Needs Into Your Estate Plan
Moving beyond the foundation of your estate plan becomes necessary as your family expands following your marriage and/or the birth of a child. Working with an experienced estate planning attorney is imperative to ensure that your estate plan achieves all of your goals; however, there are some things you should consider when contemplating how to fulfill the needs of your family within your estate plan, such as:
- The cost of raising your children to adulthood. For most parents, the number one concern when creating an estate plan is ensuring that a surviving spouse is financially secure enough to raise the children through to adulthood. Sit down with your financial advisor and figure out how much it will cost in your case and then decide how much you need to leave behind in your estate plan in the event something were to happen to you.
- Your current asset to debts ratio. This plays a huge role in every financial plan, retirement plan, and estate plan. It will also typically change over the course of your lifetime. Where you are at right now in the debt to asset ratio will impact a number of decisions within your estate plan. If you are a young family, for example, you may need to rely heavily on life insurance because you have yet to build up your assets.
- What happens to a business if you own one. If you are a small business owner you may be planning on leaving the business to your children or on the value of the business being used by your spouse for maintenance and support of your children. Unless you include a business succession component in your estate plan, however, neither of those is likely to occur as you envisioned. In fact, your business assets could be lost to estate taxes and your family left with nothing to show for your hard work.
- Don’t forget the possibility of incapacity. Ensuring that your family is taken care of in the event of your death is certainly important; however, do not make the mistake of forgetting about the possibility of your own incapacity which could leave your family in a very difficult situation, both financially and emotionally. Including an incapacity planning component in your estate plan is the best way to prevent leaving your family lost and confused.
Contact Grand Forks Estate Planning Attorneys
Please join us for an upcoming FREE seminar. If you have additional questions or concerns about creating an estate plan that takes your family’s needs into account, contact the Grand Forks estate planning attorneys at German Law Group by calling 701-738-0060 to schedule an appointment.