Estate planning is the process where you allocate all your assets to beneficiaries. The process also involves planning your retirement so that you can live comfortably. Your aim should be to plan your finances to optimize income and save on taxes. The best way to do this is to hire a good lawyer who can plan for you.
A good estate planning lawyer in New York will cost you anything like $800-$1800. If your estate is larger and more complex it could go upwards of $3500 too. You could do it yourself if you are updated about laws and financial matters too. A good book that can teach you DIY planning is available at about $100. You could probably buy software worth $250 that is competent in handling basic estate planning. But, they are basic and you will have to keep renewing them whenever you need to review the plan. It may turn out to be more expensive in the long run.
The Four Common Estate Planning Tools
The Financial Planning Association has deemed four basic tools that are integral to planning your estate. They are a Will, A Living Will or a revocable trust, a durable power of attorney, and medical power of attorney. These are the four pillars on which estate planning is built on. The other tools that you can use judiciously are insurance and gifts.
A Will is not that expensive to draft, but the cost of probate and taxes that will be levied is humongous. The idea is to use a Will in conjunction with other tools to create your customized plan.
Revocable, irrevocable and domestic trusts can be a smart way to save your property from probate costa and inheritance tax. Revocable trusts ensure that you can enjoy your property in your life time. As the property is allocated to a trust, it is not subjected to probate. Property assigned to an irrevocable trust is no longer in your ownership. This means that it is not only out of the probate net, it is also not deemed a part of your estate. Thus inheritance tax is also reduced.
Power Of Attorney
You have to take into account that you can be incapacitated at any time and unable to take decisions. You need to designate a trusted person to be your power of attorney. This person will be the authorized person to take difficult decisions on your behalf. The medical and financial power of attorney is important to estate planning.
The attorney will help you figure out how to plan effectively for your financial needs. The lawyer will also explain how to plan effectively for the uncertain future. The aim is to maximize your financial stability while you are actively working and also during retirement. This will automatically create an asset pool that you can leave behind as an inheritance for your children. Your death should not disrupt the economic stability of your family. Lifelong planning is necessary to keep your loved ones safe after you die.
What Are The Additional Costs Of Estate Planning
There are a few additional costs that come with the territory. You might have a small business that you want to include in your business asset planning. There will be an added cost for an accountant, and financial planners to set up the business as a part of your estate. The succession plan will need a competent professional to ensure that your business is passed into the right hands.
The attorney who works with you to plan your estate might charge you additionally for handling queries. Some lawyers work at hourly rates rather than charge you a flat rate for their services. It is important that you know about the billing pattern before you commit to starting your association. It is always wise to have a written fee agreement with your attorney at the beginning only.
How Long Does It Take To Complete A Plan
It is not generally a hurried task when you do undertake to create an estate plan. But, you should know the steps to take for creating a water tight estate plan. You will require a financial planner along with an estate planning lawyer to give you a complete picture. Take your time and get a broader perspective of what you want out of your plan. Understand the logistics of how the plan is to be implemented. There are many steps to go through before you come up with a plan that truly suits your needs.