Have you been thinking about retirement? No matter how young you are, you’re never too young to start making plans. The sooner you start planning for retirement and taking actionable steps towards realizing your plans, the better off you’re likely to be in retirement. Starting sooner also means you have more time to catch things you’ve missed, something that happens all too frequently with certain aspects of estate planning.
Reducing Taxes
Did you know that your estate could be taxed after your death? It all depends on what your estate is worth when you pass away and how that compares to that current year’s exemption. Many estates don’t exceed that exemption rate, so it may not be something you need to worry about, at least at a federal level. Some states have estate taxes, so you may need to plan around those as well. You can get around estate taxes by giving gifts to family, setting up an irrevocable life insurance trust, making charitable donations, establishing a family-limited partnership, or funding a qualified personal residence trust.
Create Funeral Plans
Have you ever thought about how you want your funeral to go? Plenty of people haven’t, but that’s a mistake. Making funeral plans before your death takes that burden off of the family you leave behind. It also allows you to start budgeting for it. It’s smart to make plans sooner rather than later, as there are plenty of decisions to make, including whether or not you want a memorial service. Memorial services usually take place without the casket. They’re typically done after the body has been buried or cremated.
Updating the Estate Plan as Appropriate
Don’t make the mistake of thinking that you can be done with estate planning once you’re retired and you’ve put a plan in place. Life changes regardless of whether you’re retired or not. Some changes may make it appropriate to update your estate plan. Plan to review your estate plan at least every 3-5 years or when you experience a major life event.
It takes time, effort, and a certain amount of knowledge to properly plan your estate. It’s easy to forget certain things, especially if they aren’t things you think about regularly. Let’s face it, not many people think about how taxes might impact their estate after they’ve passed away. If you have any questions about estate planning in your retirement, contact an estate planning attorney so you can get your estate planned right.
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