Estate Planning While Unemployed

Experienced Attorney Helping the Unemployed with Estate Planning in Upstate New York

estate planning worksheetTechnically, a person can create an estate plan at any time in his or her life, including while unemployed. Naturally, you want an estate plan that addresses your current assets and protects those assets. Regardless of whether you have money coming in, an estate plan is your best line of defense against creditors and other issues that might arise from your unemployed status.

How Long Will Unemployment Last?

Before establishing your estate plan, you might want to consider how long your unemployment will last. If you were to create a trust and put your assets in that trust, how would that impact your financial liquidity if you needed cash to cover expenses?

If you are freshly unemployed or recently laid off, but expect to retain employment soon, it might be in your best interest to wait until you have acquired a new job – especially if the new position will contain stock benefits or a retirement account. If you create an estate plan while unemployed, then gain a new job with more assets, you would have to redo your estate plan or update it with the new assets to remain relevant.

Do Not Touch Existing Retirement Funds if You Can

If you already have an estate plan, you might worry about cash drying up and think of taking from your pension accounts. However, think twice about withdrawing or taking a loan on a pension account while unemployed. Not only will you deal with taxes on the money removed, but you could also have difficulty paying back a loan to the retirement account when you have no funds coming in.

Consider Options for Life Insurance

While you are unemployed, you might consider life insurance. However, not all policies allow a person who is unemployed to apply and receive a life insurance policy. The application process involves numerous qualification steps to see if you are eligible for a life insurance policy.

If you want to add life insurance to your financial plan, and then include it in an existing estate plan, you may have to apply for smaller amounts of life insurance rather than big ticket policies. The larger the policy value, the higher the demand is for meeting monthly and annual income requirements.

Borrowing from Life Insurance

There are legal complexities when you want to borrow from a life insurance policy, especially if that policy is tied to your estate plan. Therefore, it is best to consult with an estate planning attorney to see how borrowing from a life insurance policy during unemployment may affect your assets or plan.

Need Assistance to Plan for the Unknown?

An estate plan can protect you even during times of unemployment. While you have a job, consider creating an estate plan for those unknown life changes that could pop up when you least expect it.

For assistance with your estate plan, speak with an attorney at the Law Office of Andrew M. Lamkin, P.C. today. You can schedule your free consultation at 516-605-0625 or request more information about estate planning online.

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