No one wants to talk about the possibility of dying, but what will happen to you, who do you want to take care of you or what will happen to your loved ones after you’re gone.

While it’s an understandably sensitive and difficult subject to broach, a lack of planning causes a lot of families to be caught off-guard if an unexpected tragedy occurs.

Let me ask you, do you have any assets, such as residence, 401K, annuity, life insurance, investment, stocks, bank account, a business or even some digital assets?

If you have any of these, do you want to safely pass your assets to your loved ones when you pass away, or you want the court to take over all your assets, freeze every assets you have, take a big chunk of that (estate tax), then pass the rest over to your loved ones?

Do you know when you pass away without an estate plan, the court can take over your assets, freeze everything and force your loved ones to pay the estate tax; how would you expect your loved ones to pay the estate tax, if all of your assets are freezing by the court. They can’t, without liquidating the assets, but assets are freezing, what will happy then?

The court can liquidate the assets that you left for your loved ones, and they don’t care about the market value, all they care about is the estate tax, the court fees, the attorney fees and etc.

Indeed, establishing an estate plan early on and readjusting your plan as needed throughout your lifetime can help you prepare for the future and leave a legacy for the people you love.

You may have been wondering if the Tax Cuts and Jobs Act of 2017 will have any impact on your long-term financial planning and the need for asset protection. Well, the estate tax exemption has doubled through 2026; if you know for sure you are going to pass away during this period of time, then great, your loved ones will have more exemptions than before.

If however, you’re like most Americans, you may not be hit with a federal estate tax, but this just might be the year for you to develop an estate plan.

Estate planning can be a neglected as part of financial planning. It’s easy to delay answering uncomfortable questions such as “What happens to my assets and my loved ones when I die?”

So it’s no surprise that most of Americans don’t have a will, and even fewer have an estate plan.

Then what is an estate plan, and how does it differ from a will?

A will is a relatively simple legal document that sets forth your wishes regarding the distribution of property; it may also include instructions regarding the care of minor children. An estate plan goes much further than a will. Not only does it deal with the distribution of assets and legacy wishes, but it may help you and your heirs pay substantially less in taxes, fees, and court costs.

An Estate plan consist of a set of documents to arrange, during a person's life, for the management and disposal of that person's estate during the person's life and at and after death, while minimizing gift, estate, generation skipping transfer, and income tax.

Most people with assets or a family should execute a will. However, not everyone needs an estate plan. The decision is a personal one and depends on more than the potential size of an estate.

The purpose of the estate planning is to avoid probate, avoid medicaid recovery, save estate tax, protect beneficiaries, protecting assets and avoiding trouble,

1. The arrival of children

A number of major life events help shape the need for and scope of an estate plan. Especially the birth of a child. Consider a young married couple having their first child. How would the child be provided for if either or both parents were to die?

In addition to a guardian, who assumes the responsibility for the care and custody of the minor child, a conservator (or "guardian of the estate") may also be necessary to manage any assets the minor child may inherit. The age of majority in a given state is set by state laws; generally, the age is 18 or 21.

Some assets can be distributed by the institution, such as a bank or brokerage firm, that holds them, so long as the owner has provided the proper instructions to the financial institution and has named the beneficiaries who will receive those assets.

If the owner also has a will, the directions in the will should be consistent with the directives provided to the financial institutions.

For example, if a beneficiary is named in a transfer on death (TOD) account at a brokerage firm, or payable on death (POD) account at a bank or credit union, the account can usually pass directly to the beneficiary without going through probate, and thus will bypass a will.

In some states, a similar beneficiary designation can be added to real estate, allowing that asset to also bypass the probate process.

For assets that do not have a beneficiary designation, the will is the instrument through which to designate who will receive such assets, and it can detail any related special instructions.

Although a will is a cornerstone of estate planning, some people may need something more extensive, and, if so, a trust can be beneficial. Read

-Viewpoints on Fidelity.com: Do you need a trust?

2. The size of an estate and the state of residence

Another important factor is the size of the estate. Does the value of the estate exceed the estate tax exclusion? In 2018, for a legally married couple, generally each spouse would have the $11.2 million federal estate tax exclusion. At the death of the first spouse, their exclusion could be taken on by the surviving spouse, allowing the survivor to exclude $22.4 million (or more, because the surviving spouse’s exclusion will be indexed for inflation) from federal estate taxes. But this will end at January, 2026.

A thorough estate plan would also include provisions addressing what would happen in the event of a simultaneous death.

Estate planning strategies have been made more complicated in recent years by the introduction of state-level estate taxation. Currently, 17 states plus the District of Columbia impose either an estate or inheritance tax or both.*

Also consider other issues around how best to manage the intergenerational transfer of assets. For example, if children aren't old enough or mature enough to handle a large inheritance, an estate plan can address this by making provisions through a trust.

3. The value of "stretching"

When reviewing assets, it's not just the sum total that matters in designing an effective estate plan. Review where your retirement investments are located—in other words, what type of account they're held in and what the beneficiary options are for each account type.

For instance, distributions from IRAs and Roth IRAs can be "stretched" so that they may last for the entire lifetime of the beneficiary, provided the recipient qualifies for that option and elects to receive it. If you're leaving money to a child or grandchild who is significantly younger (37.5 years younger) than you, this benefit could be substantial, allowing tax-deferred or tax-free growth to continue for many years—even decades.

Let's say the owner of the IRA is age 70 and his daughter, Sue, is 35. If the owner of the IRA were to die in 2018 and designated Sue as the beneficiary, Sue would inherit the IRA at age 36. Based on the Internal Revenue Code table, Sue's life expectancy would be an additional 47.5 years. By stretching distributions over her entire life expectancy, and by taking her first distribution by December 31, 2019, Sue would receive a portion of the account balance (the entire account balance divided by 47.5) in the first year. For each subsequent year, she would subtract one year from her previous year's life expectancy and divide that new life-expectancy factor into her previous year-end account balance. The account could potentially last more than 40 years.

Formula for stretch distribution: Previous years’ account balance  Life expectancy in years = annual distribution.

4. Probate and privacy concern

Another good reason to have an estate plan is to minimize the probate process and its expenses, delays, and loss of privacy and value. Among the concerns with probate are:

• Loss of privacy: Anyone can access information from the probate court. For example, relatives and creditors could get your probate records to challenge your will.
• Expense: Probate fees can be quite substantial, even for the most basic case not involving any conflict. Attorney's fees and court costs could take up to 5% of an estate's value.
• Delays: The average uncontested probate can take longer than a year.
• Loss of value: the value of your assets may reduce significantly during the delays, and the court does not care about the market trend, they may liquidate your assets to cover the estate tax and additional fees.

However, with proper planning, these delays and costs, and the loss of privacy, can often be avoided.

5. Philanthropic goals

If an estate consists of sizable assets and the owner has a desire to give to charity, there are a number of ways to incorporate those philanthropic goals into an estate plan. Charities can be named as beneficiaries in a will.

6. Business succession

If you own a business, have you considered how best to plan for the business once you have passed away? If you plan to keep it in the family, consider creating a structure that makes it easier to transfer the business’s assets to other family members, such as a family limited partnership or a family limited liability company.

7. Life stage

Engaging in estate planning can be an important activity at various points throughout your lifetime; there is no ideal age at which to begin the process. Certainly, new parents will want to consider their child’s welfare, and plan appropriately. As children grow, your financial life becomes more complex, and as your assets and needs grow and change, your existing estate plan should be reviewed to make sure it still meets your current needs, and that any future needs are anticipated.

8. Special circumstances

Two of the most common special circumstances that may affect estate planning decisions are blended families and concerns about disabilities. Of course, there may be other needs that affect a particular situation.

1. Make a will.

In a will, you state who you want to inherit your property and name a guardian to care for your young children should something happen to you and the other parent.

2. Consider a trust.

If you hold your property in a living trust, your survivors won't have to go through probate court, a time-consuming and expensive process.

3. Make health care directives.

Writing out your wishes for health care can protect you if you become unable to make medical decisions for yourself.

4. Make a financial power of attorney.

With a durable power of attorney for finances, you can give a trusted person authority to handle your finances and property if you become incapacitated and unable to handle your own affairs. The person you name to handle your finances is called your agent or attorney-in-fact (but doesn't have to be an attorney).

5. Protect your children's property.

You should name an adult to manage any money and property your minor children may inherit from you. This can be the same person as the personal guardian you name in your will.

6. File beneficiary forms.

Naming a beneficiary for bank accounts and retirement plans makes the account automatically "payable on death" to your beneficiary and allows the funds to skip the probate process. Likewise, in almost all states, you can register your stocks, bonds, or brokerage accounts to transfer to your beneficiary upon your death.

7. Consider life insurance.

If you have young children or own a house, or you may owe significant debts or estate tax when you die, life insurance may be a good idea.

8. Understand estate taxes.

Most estates -- more than 99.7% -- won't owe federal estate taxes. For deaths in 2017, the federal government will impose estate tax at your death only if your taxable estate is worth more than $5.49 million. (This exemption amount rises each year to adjust for inflation.) Also, married couples can transfer up to twice the exempt amount tax-free, and all assets left to a spouse (as long as the spouse is a U.S. citizen) or tax-exempt charity are exempt from the tax.

9. Cover funeral expenses.

Rather than a funeral prepayment plan, which may be unreliable, you can set up a payable-on-death account at your bank and deposit funds into it to pay for your funeral and related expenses.

10. Make final arrangements.

Make your end-of-life wishes known regarding organ and body donation and disposition of your body -- burial or cremation.

11. Protect your business.

If you're the sole owner of a business, you should have a succession plan. If you own a business with others, you should have a buyout agreement.

12. Store your documents.

Your attorney-in-fact and/or your executor (the person you choose in your will to administer your property after you die) may need access to the following documents:

• will
• trusts
• insurance policies
• real estate deeds
• certificates for stocks, bonds, annuities
• information on bank accounts, mutual funds, and safe deposit boxes
• information on retirement plans, 401(k) accounts, or IRAs
• information on debts: credit cards, mortgages and loans, utilities, and unpaid taxes
• information on funeral prepayment plans, and any final arrangements instructions you have made.