Estate Planning

You do—no matter your age. If you're young and single, you probably only need basic documents like a will and powers of attorney for your medical care and finances. If you have children, you'll want to name a guardian. And if you have substantial wealth, you may want to look into trusts to help control how your assets are taxed, managed, and distributed. Take a listen to our latest A Better Way to Money® podcast. You'll find out why having an estate plan is so important.

A lot. Estate planning makes sure that everything stays on track when you're no longer in control. You can use a will, trust, and other estate planning documents to speak for you when you're not able to speak for yourself.

If you don't have a plan for your estate when you pass away, state law (typically called intestate laws) will determine where your assets will go. The estate planning process can also help maintain the value of your estate by minimizing administration costs and the impact of taxes.

There's no single correct answer, but sooner rather than later is better. You can create an estate plan as soon as you become an adult. But typically, an estate plan comes into play because of major life events like getting married, having kids, and buying real estate. Even if you're not there yet, it's always a good idea to plan for the unexpected. Ask an advisor about the best options for you.

An estate plan has several components that will make sure your wishes are carried out the way you want. Here are some of the basic things you should consider:

• List all your assets, including real estate, investments, personal property, and business interests (if any)
• Draft a will that outlines how you'll want your assets to be distributed after you pass away
• Appoint someone as your power of attorney who can manage your finances if you're unable to speak for yourself
• Draft a healthcare directive or living will that can guide medical decisions if you're unable to communicate
• Consider setting up a trust to help protect your assets and lower estate taxes for your beneficiaries

Let's make sure you have all the things you need with our estate planning checklist.

An estate plan is a key part of a strong financial plan. A financial plan will help you feel at ease about your money throughout your life. An estate plan will give you (and your loved ones) peace of mind knowing that your wishes will be followed no matter what. Here are the key ways in which an estate plan works with your financial plan:

Asset distribution:

An estate plan lets you specify how your assets will be distributed among your loved ones, charities, or other beneficiaries.

Managing taxes:

A well-structured estate plan can help minimize estate taxes, gift taxes, and other tax liabilities, preserving more of your wealth for your beneficiaries.

Avoiding probate:

By making a plan for your estate, you can help avoid a long and costly process that can delay the distribution of your assets.

Protecting beneficiaries:

An estate plan can include provisions to protect your beneficiaries, like setting up trusts for young children or people with special needs.

See how an estate plan can fit into your financial plan. Talk with an advisor today.

Yes. You should have several estate planning documents. Here's what you should include:

• Powers of attorney to act on your behalf when it comes to your finances and medical care if you're unable to do so yourself
• An advanced directive or living will that states what type of medical care you want if you're unable tell doctors yourself
• A trust (if needed) to help minimize your taxes, protect your assets, and spare your beneficiaries the hassle of probate court

Having an estate plan in place is a good idea for anyone. If you choose not to have one, your estate will default to state law where you control the decisions versus who you chose. Talk to an advisor about creating a plan for your estate.

More often than not, yes. You've likely built a life together, made decisions together, and managed your assets jointly along the way. So it's a good idea to figure out who will get what when you're no longer here, so there are no surprises for your spouse. Want to know more? Check out our couples' guide to combining finances first. Then when you're ready to create your estate plan, talk with one of our expert advisors.

If you don't have a plan for your estate when you pass away, state law (typically called intestate laws) will determine where your assets will go. Estate planning can also help maintain the value of your estate by minimizing costs associated with taxes and administration. Ready to create your estate plan? Get matched with an advisor.

Yes. Probate is when a court supervises the distribution of assets based on your will or a state's intestacy laws. It can create delays, add costs (filing and attorney fees), and since records of probate court are public, there's loss of privacy. Here are two ways an estate plan can avoid probate proceedings:

• Make sure you choose beneficiaries for your life insurance, retirement accounts, bank accounts, etc.
• Set up a revocable trust that can give you income throughout our life, then will transfer your estate to your beneficiaries when you die

In general, you should update your estate plan every three to five years. You'll want to consider things like if your intentions have changed, that the right people are included, etc. However, common events like getting married or divorced, having kids, getting sick, or if you move to another state, would require you to update your estate plan sooner. Talk to an advisor about getting your plan up to date.

An estate tax and an inheritance tax are often talked about together. But there are important differences between the two.

Estate tax:

The estate tax is typically applied to your assets once you've passed away. However, it only comes into play if the value of your estate exceeds exemptions at the federal or state level. Federal and state estate taxes will be assessed on the current fair market value of your assets at the time of your death.

Inheritance tax:

Unlike the estate tax, which taxes the estate of the person who has passed away, an inheritance tax affects the person receiving the money. There's no federal inheritance tax, but several states have one. The inheritance tax is like the estate tax. It only applies if the value of your inheritance is more than the exemptions.

If you think that your estate is likely to exceed the exemptions, there are tax strategies that can help you minimize the impact. You can work with one of our financial advisors and an estate attorney to help build a solid estate plan.

To maximize wealth transfer, you'll need to make tax efficiency a top priority. By giving your wealth to others in the most tax-efficient ways, you can help pass on more of it to preserve and build wealth for future generations. Here are four key tax strategies that can play key roles in estate plans:

Lifetime gift and estate tax exemption:

Every taxpayer has an opportunity to pass on a certain value of property to heirs while you're alive so when you pass away the size of your estate will be smaller thus a smaller tax impact.

Annual gift tax exclusion:

This lets you to give away smaller amounts of money each year without paying gift tax and without impacting your available lifetime estate and gift tax exemption.

Generation-Skipping Transfer (GST) tax exemption:

Similar to the lifetime estate and gift tax exemption, but even if you deplete your lifetime estate and gift tax exemption, you won't necessarily deplete your GST lifetime exemption.

Generation-Skipping Transfer (GST) tax exclusion:

For larger estates, generation-skipping transfer tax planning can help minimize taxes when transferring wealth to grandchildren or other younger generations.