Many people dread estate planning and think of it only as writing a will or setting up a trust. Of course, there may different aspects to the process, but estate planning is far more than that. As the name suggests, it is the more significant process of planning for the future and caring for your loved ones. Planning of any kind requires that you have goals, and the following are just a few of the goals that you should consider.
Whether you are recently married, had children or acquired new assets, it is always a good idea to continually update your estate plan. If you do not yet have one, you should reach out to a legal representative to get started as soon as possible. Keep the following three goals in mind as you do so:
1. Establish financial security
The most important objective of estate planning is, of course, to establish financial security for your loved ones exactly how you intend it. Without an estate plan, your assets will be divided according to state law, which may not set your family up for security and stability in the future correctly.
2. Pass on important items
You want to ensure that your loved ones receive the financial security you have established for them, but estate planning is about so much more than just money; it is also about providing loved ones with the heirlooms and other valued items that have sentimental importance. Clarify this is your estate so that you can pass down things that are important to your family.
3. Avoid potential tax burdens
In addition to federal estate taxes that must be paid, Minnesota residents are faced with the extra burden of paying estate taxes directly to the state, too. According to Forbes, the state’s estate tax peaks at 16 percent, but this can still be a substantial hit. With proper planning, this expense can be minimized, and the tax penalties can be handled effectively.