Estate planning is something that is typically done in stages. When you first put a plan in place as a single young adult your income level, your savings and insurance, and your level of responsibility to family members will dictate some of your actions when you are planning your estate.
However, as things change in your life your estate plan is going to require updates. When you get married you have some new considerations, and when you have children things change significantly yet again.
Divorces are not uncommon, and changes in marital status would also necessitate an estate plan update.
Another significant life event that would make an estate plan adjustment necessary is the death of a spouse. When your spouse passes away you obviously will be grieving, but when it becomes possible you are going to have to put your financial affairs in order.
The first step will be to inventory your financial assets. This can best be done by creating a net worth statement.
Once you know exactly what you have you need to reevaluate your monthly financial needs and your long-term financial and legacy goals as you create a budget.
Because of the fact that the estate tax is portable the surviving spouse would have a $10.5 million estate tax exclusion to work with, and this is something you should understand as you evaluate any potential tax responsibility that you may have.
The best way to plan ahead after a spouse passes away is to engage the assistance of a good financial planning attorney who specializes in estate planning. Your lawyer will answer your questions, gain an understanding of what you’d like to do for your loved ones eventually, and advise you accordingly.