If you’re in the process of estate planning, or supporting a friend or family member to make important decisions about how they will pass on their assets, it’s natural to find yourself asking more than a few questions about the whole process. Read on for a few FAQs on estate planning, and be sure to consult a professional and check out HUECU’s estate planning content online if you need more information.
Should I Hire a Lawyer?
You don’t need a lawyer to make a will. Indeed, thanks to digital estate planning tools, it’s simple and cost effective to use an online solution via which you can create, store and access important documents; make revisions as needed; and seek professional guidance.
At the same time, plenty of people prefer to get personalized advice and document drafting support from an estate planning attorney. This is especially true for those with more assets, or who expect a more complicated legal situation regarding the passing on of their estate.
When’s the right time to start?
There’s no bad time to start estate planning. Anyone over 18 can create a will, and many people choose to do so when they purchase their first house, get married, or when they’re preparing to start a family. Keep in mind that estate planning may also include documents on medical decisions, such as appointing a healthcare proxy or specifying how you wish healthcare professionals to proceed if you are incapacitated. Estate planning documents are rarely set in stone, so there’s no real downside to starting early and revising your plans as needed.
What if I Need to Change My Will?
It’s very normal for life situations to change. You may undergo a divorce or the death of a spouse, or simply find yourself needing to sell an asset previously designated for an heir. When these changes occur, your will and other estate plans may need to change, too. Because most wills are now created and stored digitally, it’s fairly simple to make changes as needed. Your estate planning attorney may also recommend a codicil, which means writing a new supplementary document specifying which changes you want to make.
What if I don’t have a will?
If you pass on without a will, it’s up to the courts to determine what happens to your assets. This process varies depending on your state of residence. In Massachusetts, your assets may go to your spouse, your descendants, or possibly your parents. It all depends on who’s in your family and the value of your estate. You can find more specifics online.
Why do some people use a trust?
While some people choose to pass on all their assets through a will, others may use a trust as part of their estate planning strategy. A trust is a legal vehicle that enables assets to be passed indirectly from a grantor to a beneficiary, through a third-party trustee. There may be tax advantages to using a trust over a will; and in addition, a trust allows for grantors to keep transactions more confidential. If you’re interested in creating a trust, consider working with an estate planning attorney to do so.
Will my heirs be taxed on their inheritance?
Most people don’t need to worry about paying an estate tax on assets they receive after someone has passed. In 2023, the federal estate tax exemption is over $12 million—so as long as the estate is worth under that number, it won’t be subject to federal estate taxes. However, state taxes may still apply. The Massachusetts exemption amount is $1 million, so if an estate is over that amount, taxes will be levied on the estate. Massachusetts doesn’t have an inheritance tax, and there is no federal inheritance tax, so heirs won’t need to pay an additional tax on assets.
What if I want to leave assets or money to charity?
The estate planning process makes it fairly simple to set up instructions so that whatever money or assets you wish will be left to charity. You can also opt to set up a charitable trust, which may offer tax benefits for your estate. For more information on the various ways to integrate charitable donations into your estate planning, check out this blog.
How can I best protect my family?
Creating an estate plan is the first step to ensuring that your family is cared for after you are gone. If you’re nervous about the time and energy necessary to hire an estate planning attorney, you might opt for an online solution instead and create a digital will. Consider not only what assets will go to whom, but also questions around custody of dependents and how retirement accounts should be managed. You might also consider a life insurance policy.
Is it OK to use a digital will?
Digital estate planning solutions are becoming more and more common. Even if you do choose to work with an estate planning attorney, they may still administer your estate through a digital solution. The benefits of digital estate planning are myriad: from secure document storage, to easy access and sharing or documents, to a streamlined way to review and revise documents as needed.
Where should I start?
Check out HUECU’s estate planning solution if you’re ready to develop an estate plan! You can also watch the Estate Planning 101 webinar for more information on protecting your family with estate planning.