As people get older and acquire more assets, it becomes crucial to start thinking about estate planning. Through estate planning, you can ensure that your hard-earned assets are safeguarded for the future in the event of your death or incapacitation. It allows you to designate who will receive your assets after you’ve departed. As such, before constructing your estate plan, it is critical to take the necessary steps to ensure you cover all of your bases, preparing for every possibility. Please continue reading to learn about the steps you should take before you begin estate planning and how a trusted Montgomery County Estate Planning Attorney can help you draft a well-constructed estate plan.
What steps should I take before I start estate planning in Maryland?
Before you begin estate planning, the first step you should take is creating an inventory that covers your assets. Generally, people neglect to realize the amount of things they own. Creating an inventory will assist in handling your tangible and intangible assets, such as homes, vehicles, collectibles, savings accounts, stocks, mutual funds, life insurance policies, retirement accounts, etc. This way, you will better understand the assets you’ll bequeath. It is also beneficial to include any debts or outstanding liabilities that you haven’t paid off yet, as it will make it easier for the executor of your estate to notify creditors of your death when the time comes.
After creating an inventory, you should evaluate your family’s needs. You should make a will if you don’t already have one established. A will allows you to stipulate to whom and how your property will be given after your death. You should also ensure that you have enough life insurance, especially if you have children. Alongside providing your life insurance policy, you should name a guardian for your child. This can help you ensure your loved ones avoid family court disputes that could impact your estate’s assets.
Should I establish directives?
In addition, it is crucial to establish your directives. This involves creating a revocable or irrevocable trust, a medical care directive, a durable financial power of attorney, and a limited power of attorney. Your directives will allow you to appoint a trusted loved one to make medical and financial decisions on your behalf if you become incapacitated and cannot make decisions. You must choose the person you trust to comply with your wishes and make decisions on your behalf.
Furthermore, you should review your intended beneficiaries. You should ensure that you don’t leave anyone out and that the right people get the right stuff. It is also beneficial to consider estate taxes. Sometimes, your loved ones may be left with state, inheritance, and federal estate taxes, so you must create a trust to help reduce the taxes your heirs must pay.
Ultimately, there are several steps you should take before estate planning to protect your hard-earned assets. If you’re considering establishing an estate plan, please don’t hesitate to contact our determined legal team at JD Katz, who can assist you taking the necessary steps to protect your future.