Estate planning is the process of designating who will receive your assets in the event of death or disability. Often done with the guidance of an attorney, one of the objectives is to ensure that heirs and beneficiaries receive the assets in a way that manages and minimizes estate taxes, gift taxes and other tax impacts. Next, start adding your intangible assets to your list, such as things you own on paper or other rights that are based on your death. The items listed here would include brokerage accounts, 401 (k) plans, IRAs, bank accounts, life insurance policies, and other policies, such as long-term care, homeowners, auto, disability and health insurance.
Everyone over the age of 18 must have a will. It is the regulation for the distribution of your assets and could prevent chaos among your heirs. A will can also name a guardian for your minor children and designate who should care for your pets. You can also leave assets to charitable organizations through your will.
If you've changed jobs over the years, there's a good chance you still have several different 401 (k) retirement plans open with previous employers or maybe even several different IRAs. You may want to consider consolidating these accounts into an individual IRA. Account consolidation allows for better investment options, lower costs, a wider choice of investments, less paperwork and easier administration. You may want to set up 529 college savings plans for your grandchildren.
In these plans, savings increase tax-free and many states offer tax deductions to the person providing the funds. Estate planning and wills in the United States are often aimed at the most efficient way to transfer wealth to the next generation, and most people assume that an estate plan will often only benefit its heirs. Estate planning covers the transfer of assets at the time of death, as well as a variety of other personal matters and may or may not include tax planning. For single people and unmarried couples, Lamson & Cutner Elder Law planning can also address estate planning objectives.
