Nobody likes thinking about his or her own death, so it is easy to put off your estate planning until it is too late. Fortunately, estate planning is not as hard as you may have been lead to believe. In as little as an afternoon you can have a solid estate plan in place that help save your family and friends from unnecessary headaches:
You Can Write Your Own Will
Writing a will is not a long or complicated process. At the very least, you can make a simplified will that leaves everything to a single person. It will take all the guesswork out of the equation, and leave any further responsibility on them to decide what to do with your estate.
Creating a will can be done with basic DIY software. Fill in the blanks, print it out, and have you and a witness sign the document. You do not even need to have the will notarized or filed anywhere, just keep it in a safe place and let somebody know where it is.
Ownership of Retirement Plans And Joint Assets Are Predetermined
Any account or property that you jointly own with another person will automatically be passed down to the other owner. There is no reason to even mention it in a will, or to update a will if joint ownership changes.
Retirement accounts have beneficiaries that you listed when opening the account, and they will receive any money left in your retirement account automatically upon your death.
Inheritance Taxes Are Not An Issue For Small Estates
A misconception is that anybody that receives an inheritance will need to pay taxes on what they receive. This is simply not true. Unless you are leaving behind millions of dollars, chances are that everyone will receive the money you leave behind without having to pay taxes on it.
Only 8 states have an inheritance tax, and the threshold to be taxed is so high that only 2% of estates have to deal with it. The federal inheritance threshold for being taxed in 2015 will be $5.4 million, well beyond what a typical estate will ever total.
If your estate is so large that you will have to deal with the ramifications of your loved ones paying taxes, you may want to speak with an estate planning attorney about your options. There are alternate ways to divide assets, such as living trusts, that will decrease the tax liability when people receive their inheritances.
To learn more, contact a company like Acton & Snyder, LLP with any questions you have.Share