An Overview of Estate Planning

Welcome back! We hope you’ve found our previous blog post to be both informative and helpful as you seek more knowledge about forensic accounting, us here at Forensic CPA Group and what we can do to help you. Today, we’d like to discuss estate planning, providing you basic information and a sort of overview of what it’s all about, why you should care and how we can be of assistance!

Whether you realize it or not, you do indeed have an estate! Basically, everyone does because your estate is comprised of everything you own such as your home, car, checking and savings accounts, other real estate, life insurance, investments and, well, you get the idea. No matter the worth of your estate, you can’t take it with you after your time is up. So what happens to all those assets and money when you depart? Great question! Let’s answer this and many other questions you might have in today’s post!

In simple terms, estate planning is putting together a plan of action that determines what happens to all your assets after death and how/where they are distributed once you’re gone, because it’s highly likely you’ll want to control how your hard-earned money and possessions end up when you’re no longer with us! To ensure your wishes are carried out, you leave behind legally-binding instructions stating to whom your estate goes, what you want them to have and when they should receive it. Naturally, your estate is still subject to taxes, legal fees and court costs.

Perhaps this all seems pretty straightforward, but unfortunately, it is anything but. Good estate planning is crucial to securing the financial well-being of those people and organizations you care about most, so it shouldn’t be taken lightly. Good estate planning should also:

• Include instructions on your care before you die
• Name a guardian and inheritance manager for minors
• Provide for loved ones who might be irresponsible with money or need protection for debtors and creditors
• Include life insurance and disability income insurance for your family after your death
• Provided for the transfer of your business at retirement, disability or your death
• It should be an on-going process, not a one-time event and the plan should be reviewed and updated as needed over your lifetime

You don’t have to be old, retired or sick to begin estate planning or thinking about the future once you’re no longer here. Many people tend to consider their estate and what happens to it as they age because that eventuality is closer, but you should think about estate planning and begin the steps much earlier in the event something unexpected happens. It’s also not just for the rich and wealthy, either. Most everybody has much-larger equity than they realize and you want to ensure your life’s value ends up where you would like it. In fact, quality estate planning usually means more to families of modest assets because they can’t afford to lose anything more than they need to.

Unfortunately, it’s not uncommon to see people taking no action at all to plan for the future after their passing. Most individuals don’t consider estate planning either because it seems too daunting, they don’t think they have much value or they just don’t want to consider their mortality. But ignoring a potential problem doesn’t make it actually disappear. We’re here to tell you none of those excuses are valid. Start your estate planning early and change it as needed to best reflect your needs and wishes throughout your life. Don’t leave it to your loved ones to pick up the pieces of a faulty plan or none at all.

States have their own laws, regulations and procedures for distributing an estate when somebody passes on unexpectedly or without an estate plan of their own in place. That shouldn’t provide you any comfort, however. Those plans vary from state to state and take hold often after death or disability, but you or your loved ones are then left tethered to the probate laws of your state, which are generally not sufficient or are downright bad for your estate. While government and court handling of some things in life is appropriate, would you want them to control what happens to all your wealth and possessions instead of deciding that yourself and with your family? The answer to that question should be a no-brainer. Be proactive and begin estate planning now.

Contrary to what you might be thinking, estate planning does not have to cost you a ton of money. Sure, there are complex plans and circumstances that may require advanced solutions, which could cost you more money, but that’s a bridge to cross when and if you need to. Start with a simple plan and one you can afford because again, it will allow you to control things, not the government or courts. That could mean a will for a single person or young family, powers of attorney or term life insurance. Expand and change your estate planning over the years and as you can afford as most people’s financial situation improves over time. However, you should never go at this by yourself. Always hire somebody who knows what they’re doing and let them guide you through the process. You’ll still have control of what happens.

Life is never going to be easy. Not for any of us. But it sure does help you sleep a whole lot better knowing you at least have a plan and some protection for those closest to you should something unforeseen and devastating strike. You have the confidence of knowing you control where your equity ends up and that the right people receive the right things at the correct time. In the end, estate planning is one of the best things you can provide for your family.