If you have not yet made an estate plan, this short guide can help you understand the basics.
Why make an estate plan?
It allows you to pass on your assets to the people you want in a tax-efficient way. By defining how you want things to happen, it reduces the risk of confusion or disputes between your family once you are gone.
These are the steps to take when creating your estate plan:
- Evaluate your assets: List your assets and what they are each worth. Some assets are tangible and evident to all, such as your farm or vehicles. Others less so, such as bank accounts, investments or life insurance policies. You may require expert help when valuing certain things.
- Understand the tax laws and financial options available: The actions you need to take depend upon how much you own. The more you own, the more you may want to investigate financial options such as trusts to avoid paying too much tax when transferring your estate.
- Provide for your spouse and children: If you were to suffer a fatal farming accident tomorrow, have you made plans for your family? What about if you and your wife died next week, leaving your young kids alone? Who would look after them? It is easy to think of death as something far off, but you never know. Your estate plan needs to cover all possibilities, from living a few days to a few decades more. You can always change it later.
- Consider your future: Estate planning can help if you are unable to make decisions for yourself at some point. You can set up powers of attorney and health care directives to predetermine how you will be cared for, and give someone the right to make decisions on your behalf.
It would be a shame not to pass on as much as possible to your family because you did not have a plan. Seek legal help to create your Sioux Falls estate plan.