Make Estate Planning One of Your Smartest Goals This Year
Getting in shape, building your savings, or picking up a new skill are all great goals to pursue—but one of the most impactful things you can do for your future and your family is to prioritize estate planning. It’s a resolution that’s often easier to achieve than people realize and offers major benefits—both financially and emotionally. Whether you’re creating a new estate plan or updating an older one, here are some compelling reasons to make it a priority this year.
Estate Planning Laws Change—And So Can Your Exposure to Taxes
Estate planning laws continue to evolve at both the state and federal levels. Exemption thresholds, tax rates, and requirements for documentation can shift with little notice—and failing to keep your plan up to date may expose your estate to unnecessary taxes or legal complications.
It’s also important to understand what counts as part of your “taxable estate.” Many people underestimate the total value of their assets, assuming they won’t owe any estate tax. In reality, your estate includes everything you own at the time of your death: real estate, retirement accounts, investments, bank balances, personal property, and even life insurance proceeds. Life insurance is one of the most commonly overlooked assets in estate planning—because while the payout happens after death, it still contributes to your estate’s total value.
Massachusetts does not impose an inheritance tax, which means beneficiaries do not pay taxes on the assets they receive from an estate. However, Massachusetts does have a state estate tax, which applies to the total value of the deceased person’s estate before any assets are distributed to heirs. This tax can significantly impact how much beneficiaries ultimately receive, depending on the size of the estate.
A well-crafted estate plan can help you minimize or even eliminate unnecessary taxes, protect your assets, and ensure they’re distributed according to your wishes—not the state’s.
Take care of yourself and your loved ones if you become disabled.
It is estimated that 60% of us will need long term care sometime during our lives. It is important for all of us to prepare for that day when we will need to help loved ones with elder care or we will need elder care for ourselves. It is important to protect your assets so that you can maintain financial security through old age and leave a legacy behind. It is also important to let your loved ones know how you want them to handle things so that they are not left carrying the burden of hard decisions down the road.
Protect and provide for your children.
If you have minor children an estate plan is essential. Having an estate plan allows you to name guardians for your child should the unthinkable occur. If you want to leave an inheritance to your child or grandchild but don’t want them to have to manage large amounts of money while still immature, you can create a trust that will distribute their inheritance as you choose—perhaps gradually over the years or when they reach a certain age.
Give what you have to whom you want, how you want, when you want to.
If you think you don’t have an estate plan, you’re wrong. It’s just that you don’t have a say in it. The state created the laws of intestacy to distribute your estate for you if you do not have your own plan. However, these rules very often go against people’s personal wishes. Without an estate plan you lose your voice and the government decides how your family is treated.
Empower the right people for the right job.
You want to make sure that the individuals you have named in key positions in your estate plan (if you have one) are still able to serve and that they are still who you would choose to make decisions for you. The nominations to review in your Will include your named Executor and any Trustee or Guardian named therein. You should also review who you named to serve in your Durable Power of Attorney and Health Care Proxy. If you don’t have an estate plan, these are important powers that you want to delegate.
Control your property while you are alive.
It’s your money—you worked for it and now you should be enjoying it. Using an estate plan that combines a revocable or irrevocable trust, you can protect your assets from creditors and for posterity while still enjoying the fruits of your labor. Even if you become incapacitated, you can direct how your affairs should be handled and how you want to be cared for.
Save every last tax dollar, professional fee, and court cost legally possible.
There is absolutely no reason why you should pay more in taxes and fees than you are legally responsible for. Would you send in more than your income tax bill says you should? Would you pay a little extra on your health insurance bills, just because? I don’t think so. A well-crafted estate plan reduces taxes on your estate and can help reduce or eliminate probate fees and other legal fees that people without estate plans must pay.
Circumstances change.
Personal circumstances often change enough in five years to require an estate plan review. Do you still live in the same state? Are the guardians of your children and their trustees still local and convenient to them? Do the trust ages you chose still make sense? Should young adult children now be the executors? Have you purchased more insurance? Are your assets worth much more or much less?
Charitable intentions need to be reflected in your will.
If you wish to leave assets to a particular charity or religious organization you must put these wishes down in writing to make sure they happen. Often, there are more tax advantageous ways to give money than simply writing a check. An estate plan can make sure your gift offers the most benefit for you and your charity.
Plan for Long Term Care.
People routinely prepare for unexpected disasters by insuring their homes, automobiles and health and saving for their retirement. However, no life event can be as devastating to your lifestyle, finances and security as needing long term care. The costs of long term care can be staggering, and without proper planning, can completely wipe out your estate. Planning ahead eliminates this fear and provides financial security for you and your family.
Avoid Probate Court and Family Conflict
Avoiding probate is one of the most common reasons people turn to an estate planning attorney. Probate is the court process required to validate a will, appraise assets, settle debts, and distribute property—and it can take months or even years to complete. On top of being costly, probate is public, stressful, and often fuels family conflict. By establishing a trust, you can ensure your property is transferred directly to your heirs without court intervention. This protects your legacy and spares your loved ones the legal and emotional burden of probate court.
It’s easier than you think.
The hardest part of estate planning is just getting started. After that, however, the process is fairly quick and inexpensive and will provide enormous peace of mind. Even better, estate planning is an investment for your family that will almost assuredly pay for itself ten-fold, either by avoiding unnecessary tax and probate fees down the road or by protecting assets from long-term care costs and other creditors. Call the Heritage Law Center now to get started on protecting your assets and loved ones in the new year.
