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5 Essential Estate Planning Tips Everyone Should Know

5 Essential Estate Planning Tips Everyone Should Know

We understand, estate planning can be a difficult process to start. Decisions about how to pass on your assets -- and in many cases, your life’s work -- can bring up strong emotions. If your estate is complicated, you may be unsure of where to begin. But getting started is often the hardest part, and it’s worth it, because in the end, an estate plan can put you in control of important decisions such as:
 
  • Who will be in charge of your estate
  • Who will receive your assets
  • Who can make important decisions on your behalf
 
No matter the size and complexity of your estate, these tips will help you get started.

1. Have a Will or Trust

The most important pillar of your estate plan will most likely be a Will or Revocable Trust. These two different documents both serve essentially the same purpose: allowing you to decide how and when your assets will be distributed to your beneficiaries. Both a Will and a Revocable Trust give you control over:
 
  • Naming someone you trust to carry out your wishes
  • Estate tax planning
  • Naming who receives yours assets

The Difference Between Wills and Revocable Trusts

Why use a trust for estate planning? Trusts are usually more complicated and expensive to set up than Wills, but they offer two main advantages:
 
  • Your loved ones don’t have to go through probate (the court process of proving your Will and distributing your assets). A trust makes this process private and streamlined, so your loved ones can avoid a potentially long, expensive court process.
  • You can create a plan for incapacity in a trust.
 
Wills are generally simpler documents, so they can be a great option for people with less complicated estates. They also allow you to name a guardianship for minors.

2. Planning for Incapacity: Power of Attorney & Advance Directive

The next two essential documents you’ll want in a basic estate plan are:
 
  • A General Durable Power of Attorney, which names someone you trust to manage your financial affairs if you become incapacitated.
  • An Advance Directive, which gives someone the authority to make healthcare decisions for you if you’re ever not able to make those decisions on your own.
 
These situations are hard to think about, but making these contingency plans is truly a gift to your loved ones. In the event that you become incapacitated, they’ll understand your wishes clearly and they won’t be forced to seek a court order before they can get you the help you need.

3. Understand Tax Considerations

When you’re planning your estate, you’ll want to work with attorneys who understand federal and state taxes related to estate planning in your area. A few important tax considerations include:
 
Estate Tax: a tax applied to your assets when they’re passed on after your death. Some states have additional state level estate taxes (Oregon and Washington included).
 
Gift Tax: a tax on any value (such as money or property) that you donate or give to another person during your life. There are a few specific types of gifts that don’t need to be reported, including gifts to a spouse and gifts towards certain medical and educational expenses.
 
Charitable Gifts: can result in substantial income and estate tax advantages. Good charitable gift planning is the best way to make sure the people you care about benefit from your gifts.

4. Communicate with Your Loved Ones

It’s not always easy to start a conversation with the people you love about what will happen at the end of your life, but having that conversation can make the process easier for everyone. It’s also the best way to ensure that people have the information they need to carry out your wishes as you intend.
 
When families don’t talk about these issues, people are sometimes caught by surprise when they read a Will or trust and don’t understand the reasoning behind important decisions. This can cause a lot of unnecessary stress and confusion.

5. Update Your Estate Plan Regularly

Regular maintenance and adjustments are crucial aspects of any good estate plan. Big life events can dramatically change how you want your estate to be handled. For example:
 
  • Marriage
  • Divorce
  • The birth a child
  • A move to another state
  • A death in the family
  • Change in assets (receipt of inheritance) 
 
Estate planning and tax laws are always changing too, and these changes might negatively affect your estate plan unless you keep it updated. In general, we recommend reviewing your estate plan once a year.

We Can Help You Protect What Matters Most

You don’t have to do all this on your own. The Estate Planning Attorneys at Gevurtz Menashe
Can walk you through the process, explaining your options along the way and ultimately creating a plan that achieves all your goals.
 
Taking the first step is often the hardest part, but if you’re ready to talk to an attorney about your estate plan, give us a call today at our Portland or Vancouver office or contact us online.