Inheritance planning, also referred to more broadly as “estate planning,” is something that everyone should engage in at some point. One of the biggest questions – and biggest misconceptions—relates to exactly when inheritance planning should start. In fact, among the most common mistakes people make is putting off the creation of an inheritance plan because they are under the (mistaken) impression that they do not need one yet. To help you avoid making the same mistake with your estate and your future, the estate planning attorneys at Hedeker Law, Ltd., explain when inheritance planning should begin for everyone.
What Is Inheritance Planning?
The term “inheritance planning” can be somewhat misleading because it actually often includes much more than simply deciding what will happen with the inheritance you leave behind for loved ones. Creating a roadmap for the distribution of your estate assets after you are gone is definitely part of inheritance planning; however, over the course of your lifetime, your inheritance plan should grow to include a wide variety of additional goals and objectives in addition to just deciding how your assets will be divided among loved ones. Every plan is unique, but some common additions to a comprehensive estate plan include incapacity planning, probate and tax avoidance, and Medicaid planning. All of the components of your plan will be inter-related and work together to create an overall master plan.
Aren’t I Too Young to Need Inheritance Planning?
A common misconception is that you need to reach a certain age, or some significant milestone in your life (such as getting married or becoming a parent) before inheritance planning becomes necessary. This is simply not true. Every adult can benefit from having a plan in place. In some ways, someone who is unmarried and without children needs an inheritance plan even more than those who are married and/or have children. If you were to become incapacitated tomorrow, who would make healthcare decisions for you? Without a spouse, it could become an ugly and protracted court battle to decide if you failed to make the decision yourself within a comprehensive estate plan.
Isn’t My Estate Too Small to Warrant Inheritance Planning?
The other common explanation for not yet creating an inheritance plan is the belief that you need to first acquire valuable assets for an inheritance plan to be warranted. Also not true. Yes, part of an inheritance plan is deciding who will receive your estate assets when you are gone; however, your plan serves other purposes as well. Moreover, just because your estate assets are not monetarily valuable at this point doesn’t mean they have no value to you. You probably know you would want to receive family heirlooms and other sentimental personal property that you own. Without a plan, however, those designated beneficiaries will likely not be the ones who receive the assets.
Reviewing and Revising Your Inheritance Plan
Keep in mind that it is okay to start small with your inheritance plan. If you have yet to marry, become a parent, or acquire your fortune, you probably don’t need an elaborate inheritance plan. A simple Last Will and Testament along with an advanced directive may be sufficient for you at this point in your life. As you move through the various stages of your life though, you will need to review and revise that simple plan, adding in additional components as needed. Marriage and/or parenthood will call for the addition of an incapacity plan. As your estate assets grow in monetary value, probate avoidance, retirement planning, and asset protection components should be added. Eventually, you will want to think about Medicaid planning, retirement planning, and even funeral and burial planning. It all starts, however, with creating you basic inheritance plan now.
Contact Illinois Inheritance Planning Lawyers
For more information, please download our FREE estate planning worksheet. If you have additional questions or concerns regarding inheritance planning, contact the experienced Illinois inheritance planning lawyers at Hedeker Law, Ltd. by calling (847) 913-5415 to schedule an appointment.
Latest posts by Dean R. Hedeker (see all)
- Is Your Life Insurance an Untapped Asset? - August 20, 2019
- Estate Planning Concerns for Parents with Young Children - August 15, 2019
- Don’t Forget to Name a Successor Trustee - August 8, 2019