Death is not usually a topic that’s discussed much in our culture. Most people think it doesn’t make for nice dinner conversation. Nevertheless, when it comes to passing on, it’s not a matter of “if” but “when”. Death is certain, but if you don’t have estate documents, the status of your assets is not.
Recent studies have shown that less than half of Americans have wills. Shockingly, only about a third of adults with children under 18 have a will or living trust. To protect your assets and provide for your surviving family members, it’s important to plan your estate now.
What Is An Estate?
In simple terms, an estate is everything you own. So yes, you have an estate. In fact everyone — just about everyone — has an estate.
An estate can include:
- Bank accounts
- Houses and other real estate
- Cars and other vehicles
- Life insurance
- Personal belongings
Who Is Estate Planning For?
Do you have stuff? Congratulations, estate planning is for you! Believe it or not, estate planning is something that just about everyone should think about. It’s not just for the wealthy or retirees.
Many people dismiss the idea of estate planning for a number of reasons:
- They think they’re not wealthy enough
- They think they’re not old enough
- They’re too busy
- They think they have time
- They’re confused about the process
- They just plain don’t want to think about it
The truth is, accidents and illnesses can happen to people at any age. As the saying goes, it’s better to be safe than sorry.
Why Estate Planning Is Important
Estate planning is just a fancy legal term that describes what you’re going to do with all your stuff after you’re gone. Technically, it’s what your surviving family members are going to do with all your stuff. That’s why it’s so important to have a plan.
Having a clear estate plan in place will help your friends and family members carry out your wishes. You can decide how to divide up your assets yourself, instead of the responsibility falling to a family member, or worse, the courts.
Estate planning can be even more essential to families of modest means because they can afford to lose the least. Keep that in mind when you think you’re not wealthy enough to do estate planning.
The Basics of Estate Planning
An estate plan is made up of multiple documents, each serving a different purpose. These documents can cover everything from setting up trust funds for your children to designating your power of attorney.
Here is a brief overview of some of the most common estate planning documents:
Last Will and Testament
Your will is the most important part of your estate plan. It determines things like how your assets are divided, who will be the guardian of your children, and who is designated to carry out your wishes.
It’s important to note that your will can only go into effect after you die. It does not offer any protection if you become physically or mentally incapacitated.
A living will is a document that protects you if you are in a condition where you can’t make decisions for yourself. For example, if you are hospitalized and unconscious or your abilities are severely limited. If you have strong feelings about when or when not to receive resuscitation or life-sustaining care, you would indicate them in your living will.
Power of Attorney
By giving someone the power of attorney, you are granting them permission to make decisions for you. Generally, you would appoint a spouse, family member, or close friend.
You can grant power of attorney for both healthcare and financial purposes. It does not have to be the same person, but it can be if you’d like. Those with health care power of attorney can make medical decisions, while those with financial power of attorney can manage your finances.
A living trust is a legal document that places your assets into a trust during your lifetime. Upon your death, it is transferred to your designated beneficiaries. Many people choose to create a trust in addition to a last will.
The biggest benefit of creating a trust is it will help you avoid the probate process. It protects your assets from being drained by court and legal costs. It also helps your heirs to receive their inheritance faster with less hassle.
What Is Probate?
Probate is the legal process that occurs after you die in which a court sees that your debts are paid and your assets are distributed according to your will. Probates can be expensive as legal fees, executor feeds, and other costs mount quickly.
Proper estate planning helps ensure that your assets are protected and you pay the least amount possible in taxes, legal fees, and court costs.
How To Create An Estate Plan
There are many different ways to create an estate plan. Estate planning is a very individualized process, and what’s best for you may not be what’s best for someone else.
You can hire an attorney to help you through the process and create the documents you need. If you’re looking for a basic, inexpensive plan, consider using a website such as Legal Zoom.
Do your own research to figure out the best path for you. Remember, when it comes to estate planning, something is better than nothing.
Tangible Personal Property
In addition to all the big things like bank accounts and property, your estate also consists of all your personal belongings, from your wedding ring to your living room couch.
These items are collectively called tangible personal property. It’s relatively easy to distribute financial assets, but distributing physical personal property can be much more challenging.
There are many different approaches when it comes to distributing tangible personal property that’s not specified in the will or trust.
- Sell all the property and divide the proceeds
- “Work it out” amongst the family
- Get an appraisal for high-value items
No matter how you approach it, handling tangible personal property can be challenging and time-consuming.
How We Can Help
Some personal property has emotional and sentimental value. Other personal property may have more economic value.
Heirs might rather sell their inherited property in order to:
- Pay off debt
- Plan for retirement
- Fund a child’s education
- Pay off a mortgage
When it comes to inherited jewelry, Samuelson’s Buyers can help. At Samuelson’s Buyers, we work with beneficiaries to evaluate the worth of estate jewelry. We help them get the most value out of estate jewelry.
If you’re located in the DC, Virginia, and Maryland area, you can schedule a free confidential, no-pressure evaluation. Selling estate jewelry is a personal decision, and we approach it with the utmost sensitivity.
Planning your estate can be challenging, but having a plan in place will give you peace of mind and help your family too.
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