For many people, estate planning begins and ends with their last will and testament, with perhaps some advance directives to avoid problems if they become incapacitated. However, there are some less well known estate planning issues that you should consider, especially if you own a variety of different types of assets. Here are five estate planning issues you may not have considered, but which may have an impact on you or your loved ones:
- Outstanding debts and obligations
- It is bad enough that people need to deal with debt collectors while we are still alive, but even death will not keep creditors away. It is very common for creditors to seek payment from a person’s estate after they die, looking to collect what they say they are owed. If you have borrowed significant monies, whether through mortgages or reverse mortgages, or if you tend to carry large balances on credit cards and other purchases, you may find a large portion of your loved ones’ inheritances going to pay bills instead if you don’t prepare with adequate planning.
- Retirement accounts
- It is relatively common these days for people to have some kind of retirement account or benefits. These may include pensions, 401(k) accounts, IRAs, or other similar accounts that allow someone to pay for their retirement after they are no longer working. What some people do not realize is that they can pass on their retirement benefits to their heirs with the smallest possible tax consequences through careful estate planning, allowing them to gain the maximum amount of benefits even if you are no longer around to enjoy them.
- Life insurance
- Another issue that is often overlooked in estate planning are life insurance policies. Such policies will pay out upon your death, which can be meant to cover the costs of your funeral, along with any other expenses that may arise. However, you can also name one or more people as beneficiaries to your policy, ensuring they can receive the benefits of your life insurance policy directly and outside of your estate.
- Care for children and dependents
- Another issue that can often create issues is what to do with a person’s minor children or other dependents. This especially tends to be a problem for people who die younger, who are more likely to have young children they need to care for. With proper estate planning, though, you can ensure your dependents will be legally and financially cared for, if you are no longer able to care for them yourself.
- Living trusts
- Not every aspect of estate planning is about helping people after you pass away, or when you fall into poor health. A living trust (also known as an inter vivos trust) can allow you to place your assets in a trust that will be managed on your behalf, by yourself or by someone else. When you pass away, the assets in the living trust will then be distributed according to your wishes, allowing you to circumvent many of the requirements of the probate process. However, you should speak to a lawyer to see if a living trust would be appropriate for you.
Do not wait until it is too late to begin planning your estate. The attorneys at the Law Offices of Hunziker, Jones, and Sweeney understand that the aging population has specific and diverse needs. The firm helps seniors and their families by handling all aspects of elder law including end of life planning, asset preservation, Medicaid planning, and other trusts and estates issues. If you need to consult on elder law issues, call The Law Offices of Hunziker, Jones & Sweeney at (973) 256-0456 or fill out our contact form for a consultation.