Estate planning is a great way to make sure your loved ones are well taken care of after you die. So, if you’ve not yet started estate planning, now is the time to do so. Here’s what you need to know in 2022.
Have a comprehensive will
Without a will, your loved ones may not know who should inherit your assets. In addition, if you don’t have a will, the state will decide how your assets get distributed, which may not be what you would have wanted. So it’s important to have a comprehensive will that spells out exactly who should inherit your assets and in what proportions.
Create a durable power of attorney
A durable power of attorney gives someone you trust the authority to make financial decisions on your behalf if you become incapacitated. This is a good idea, especially if you have young children or elderly parents who may need help managing their finances.
Make sure your beneficiaries are up to date
If you haven’t reviewed your beneficiaries in a while, now is the time to do so. Make sure that the people you want to inherit your assets are still listed as beneficiaries on your life insurance policy, retirement accounts, and other financial accounts.
Consider a trust
A trust can be a useful estate planning tool, especially if you have a complex financial situation. A trust is a legal document that allows you to transfer assets to another person or entity while retaining control over those assets. This can be a helpful way to provide for your loved ones after you die, and it can also help reduce estate taxes.
Familiarize yourself with estate tax laws
Estate taxes can be a major expense for estate planners. So it’s important to familiarize yourself with the current estate tax laws and plan accordingly. Currently, for instance, the federal estate tax exemption is $12.06 million for an individual in 2022. Understanding such laws is important for those with larger estates as they may be subject to estate taxes upon death.
These are just a few things you need to think about when planning your estate for 2022. By taking the time to do some research and put together a plan, and taking these steps now, you’ll make things easier for your loved ones when it comes time to distribute your assets.