Planning Ahead Saves Your Family Stress—and Money
A lot of us don’t want to think about what will happen to our finances after we die, but taking the time now to think about wills and estate planning can save our families a lot of stress—not to mention money—later on.
There are numerous online will services available—LegalZoom and Rocket Lawyer are two of the more popular legal document firms offering online will services—but online will services are not for everyone.
Here’s what LegalZoom has to say about whether or not you should file an online will through its services: Making a will online may be a good idea for those whose assets are worth less than estate tax limits (both federal and state) and who have a fairly straightforward estate. If your estate could be subject to estate tax, consulting a lawyer is advisable. Issues such as stepchildren, re-marriage, property located in different states, or a small business may also raise complications that would benefit from legal advice.
You should also consider whether you think someone is likely to contest your will after your death. If so, you may want to consult with an attorney. How do you know if your estate exceeds the federal estate tax limit? The IRS has some advice:
Most relatively simple estates (cash, publicly traded securities, small amounts of other easily valued assets, and no special deductions or elections, or jointly held property) do not require the filing of an estate tax return. A filing is required for estates with combined gross assets and prior taxable gifts exceeding $1,500,000 in 2004-2005; $2,000,000 in 2006-2008; $3,500,000 for decedents dying in 2009; and $5,000,000 or more for decedent’s dying in 2010 and 2011 (note: there are special rules for decedents dying in 2010); $5,120,000 in 2012, $5,250,000 in 2013 and $5,340,000 in 2014.
Let’s say you’ve read those two statements from LegalZoom and the IRS and you’re thinking “Okay, my assets are probably larger or more complicated than an online will is likely able to handle.” That means it’s time to take a look at estate planning services.[caption id="attachment_716077" align="aligncenter" width="640"] Source: iStock[/caption]
To quote Forbes: “Estate planning is the process of legally structuring the future disposition of current and projected assets.” When you work with an estate planning lawyer, you prepare in advance for the taxes and costs that your estate is likely to incur after your death. You make adjustments to your estate now to reduce this tax burden and increase the amount of wealth that you pass down to your descendants.
You also create a will that clearly states how your assets are to be distributed, including how money and property is to be divided or shared among family members as well as any charitable donations or similar bequests.
So which do you choose—an online will, or estate planning services? It all depends on your current assets and whether you trust that an online will is enough to adequately protect and pass on your assets to the next generation, or whether you want to use an estate planning service to formalize the distribution of a larger set of assets, property, and valuables.
Written by Nicole Dieker. The views expressed herein are not intended to serve as a forecast, a guarantee of future results, investment recommendations or an offer to buy or sell securities by FutureAdvisor. Differences in account size, timing of transactions and market conditions prevailing at the time of investment may lead to different results, and clients may lose money. Past performance is not indicative of future results.