Protecting assets against potential loss is one of the key parts of estate planning. You’ll want to be sure that your money and property are safe both during your lifetime and after you pass. One of the most important ways you can do this is to create a medicaid plan. Nursing home care is very costly and it’s not covered by medicare or other medical insurance except in very limited situations. Medicaid does cover custodial care in a nursing home, which is the routine care most people need—but you must have limited assets to qualify. Making a medicaid plan to avoid spending down your wealth while ensuring you can get access to nursing home coverage can be very important.
Complex probate processes can be costly and take years to finalize. This is why many individuals retain an estate planning attorney to minimize probate proceedings. Lengthy proceedings can be frustrating for heirs who are rightful beneficiaries but must comply with the probate process. The average cost of probate varies by state. However, 5 percent to 10 percent of an estate’s value in administrative costs and legal fees is typical. Some estates may lose as much as 20 percent of their value as a result of the process. Other fees may include executor compensation, court fees for filings and paperwork, and a probate bond.
Estate planning is the process of creating a plan in advance and naming who you want to receive the things you own after you die. Believe it or not, everyone has an estate plan in place even if you have never proactively created one. This estate plan is commonly known as the “state intestacy laws. ” or as we like to call it here at mcdonald law firm, the “annapolis plan. ” if you’re a resident of the state of maryland, and you die without creating a formal estate plan (will or living trust ), your assets, held solely in your name and without a beneficiary designation, will be distributed according to the intestacy laws of the state of maryland.
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Taking the first steps to create an estate plan can seem intimidating, but it doesn’t have to be. The key is to rely on a team of trusted professionals, including a financial advisor, estate planning attorney, and accountant. They know the questions to ask and can help you avoid potential pitfalls. If you don't currently have relationships with these individuals, a financial advisor is a good place to start. He or she can discuss his or her role in the planning process and can refer you to an estate planning attorney who can work with you to draw up the necessary documents.
As you can see, you must consider many factors when planning for circumstances after your death. While an estate planning attorney and financial advisor can provide you with situation-specific advice, familiarizing yourself with the information shared above is a great place to start. Also keep in mind that circumstances can (and will!) change throughout your life, so estate planning is not a “one-and-done” deal. With this in mind, be sure to review your key estate planning documents on a regular basis to ensure they continue to meet all of your objectives.
What is “estate planning”? estate planning is a process that continues throughout your adult lifetime, through which you evaluate your current situation and plan for the future. Estate planning is often part of the larger process of lifetime financial planning. Estate planning is much more than identifying where your belongings should go after you die. Estate planning involves creating a lifetime plan for your retirement as well as for the possibility of disability and health care needs, and eventually, for death. During the estate planning process you will look at a range of legal, financial, emotional, and logistical issues. Estate planning helps you understand your goals and then creates a roadmap to achieve those goals.
This is possibly the most overlooked, yet also one of the most important, aspects of estate planning. When someone dies, there is a lot of stuff that needs to be done. Think about it. Does your family know everything they will need to manage your estate? do they know where your assets or title documents are located? do they know what insurance policies you have? do they have information about your pension or retirement accounts? do they know where the key to your safe deposit box is located? do they have your computer logon information? do they know what digital assets should be deleted or preserved? do they know what subscriptions and services need to be canceled?.
Make a list of your assets and debts. This includes everything that contributes to your net worth. Vehicles, retirement and investment accounts, your home and other properties, bank accounts, stocks and bonds, businesses you own, and any other valuable property should all be accounted for. Gather important supporting documents. Next, you'll want to gather any documents associated with your estate. This includes marriage certificates, divorce papers, insurance policies, business agreements, property deeds, vehicle titles, and bank account information. Any usernames or passwords associated with these assets are helpful as well. Place these important documents in a safety deposit box.