What is Estate Planning
No matter how large or how modest, everyone has an estate and the something in common; you can't take anything with you in the the invent of death. When that happens you probably want to ensure your wishes are carried out. Estate Planning allows you to remain in control, when it comes to instructing whom receives something of yours, what you want them to receive, and when they are to receive it. An estate plan is a set of documents which contains instructions for the disposition of your assets following death. It may also include health care directives or powers of attorney to assist with medical care or decision making if you are incapacitated. However, good estate planning is much more than that, developing an estate plan with an attorney or a trusted advisor can help ensure that your wishes will be carried out.
Things to consider:
Messages for loved ones
How would you like to be remembered? What fond memories or lasting advice would you like to share with special people who have touched your life? Are there certain values or principles you want to pass on? You may wish to buy a journal to write down your thoughts. A simple way to start is drafting the preamble to your will or even writing your own obituary.
Distribution of personal assets
Consider those items that you treasure and would like to leave with loved ones for generations to come. Make a list of assets; name the person to whom the asset is to be given. To ensure these items are distributed according to your wishes, it is suggested that this list should be incorporated in to your will or trust. However, the best approach to this situation is to meet with your attorney to discuss the details of personal property and distribution.
Pre-planning a funeral or memorial service
Pre-planning the details of a funeral or memorial service gives you peace of mind and eases the emotional and financial strain for loved ones left behind. You can share your final wishes with loved ones and involve them in decision making. You can plan how to pay for a funeral or memorial service or pre-fund it to spare your family financial worry.
Matching your plan to your needs
Sound estate planning is one of the most important steps you can take to preserve your legacy and protect your loved ones. Some reasons for preparing a plan include: setting up a trust to benefit your heirs and/or charities; reducing the tax impact on your estate; determining how to divide property; caring for family members with special needs and avoiding the probate process and making sure beneficiary designations are current.
Your personal goals and those of your spouse
The size of your estate for tax purposes and the assets available to fund your bequests. Consult an advisor to help you create a net worth statement and a list of financial assets (pension or 401k plan, life insurance policies, stocks, bonds, mutual funds, bank savings and checking accounts, homes, collectibles)
Services available through your employer such as will preparation, legal services or estate planning resources
Significant changes in your life, such as a divorce, marriage, the birth or adoption of a child, the death of a close family member, or changes to the estate tax laws - both state and federal
Healthcare directive
A health care directive states your wishes in the event you are unable to influence or decide what medical treatment or life-sustaining measures you would want administered. In most states, you also can appoint a health care representative to make your medical decisions should you become physically or mentally incapable of doing so.
Living will
Living wills are legally valid and binding documents that direct a patient's physician to withhold or withdraw life-sustaining procedures in certain circumstances. In most states, patients have a right to make this directive if they are terminally ill or if life-sustaining procedures serve only to postpone the moment of death. Living wills must be prepared and executed according to state law to be valid and effective. For assistance in the drafting and execution of a living will, consult an attorney.
Durable Power of attorney
A power of attorney is a legal document through which you give another individual the authority to make certain decisions or to act on your behalf when you are unable to do so. For example, if you are hospitalized, you may need someone to pay bills or access banking accounts for you.
Trusts
Used for a variety of purposes, trusts can be created and funded during your lifetime or at death. Some of the primary purposes for utilizing trusts include:
Things to consider:
- Include instructions for passing your values (religion, education, hard work, etc.) in addition to your valuables.
- Include instructions for your care if you become disabled before you die.
- Name a guardian and an inheritance manager for minor children.
- Provide for family members with special needs without disrupting government benefits.
- Include life insurance to provide for your family at your death, disability income insurance to replace your income if you cannot work due to illness or injury, and long-term care insurance to help pay for your care in case of an extended illness or injury.
- Provide for the transfer of your business at your retirement, disability, or death.
- Minimize taxes, court costs, and unnecessary legal fees.
- Be an ongoing process, not a one-time event. Your plan should be reviewed and updated as your family and financial situations (and laws) change over your lifetime.
Messages for loved ones
How would you like to be remembered? What fond memories or lasting advice would you like to share with special people who have touched your life? Are there certain values or principles you want to pass on? You may wish to buy a journal to write down your thoughts. A simple way to start is drafting the preamble to your will or even writing your own obituary.
Distribution of personal assets
Consider those items that you treasure and would like to leave with loved ones for generations to come. Make a list of assets; name the person to whom the asset is to be given. To ensure these items are distributed according to your wishes, it is suggested that this list should be incorporated in to your will or trust. However, the best approach to this situation is to meet with your attorney to discuss the details of personal property and distribution.
Pre-planning a funeral or memorial service
Pre-planning the details of a funeral or memorial service gives you peace of mind and eases the emotional and financial strain for loved ones left behind. You can share your final wishes with loved ones and involve them in decision making. You can plan how to pay for a funeral or memorial service or pre-fund it to spare your family financial worry.
Matching your plan to your needs
Sound estate planning is one of the most important steps you can take to preserve your legacy and protect your loved ones. Some reasons for preparing a plan include: setting up a trust to benefit your heirs and/or charities; reducing the tax impact on your estate; determining how to divide property; caring for family members with special needs and avoiding the probate process and making sure beneficiary designations are current.
Your personal goals and those of your spouse
The size of your estate for tax purposes and the assets available to fund your bequests. Consult an advisor to help you create a net worth statement and a list of financial assets (pension or 401k plan, life insurance policies, stocks, bonds, mutual funds, bank savings and checking accounts, homes, collectibles)
Services available through your employer such as will preparation, legal services or estate planning resources
Significant changes in your life, such as a divorce, marriage, the birth or adoption of a child, the death of a close family member, or changes to the estate tax laws - both state and federal
Healthcare directive
A health care directive states your wishes in the event you are unable to influence or decide what medical treatment or life-sustaining measures you would want administered. In most states, you also can appoint a health care representative to make your medical decisions should you become physically or mentally incapable of doing so.
Living will
Living wills are legally valid and binding documents that direct a patient's physician to withhold or withdraw life-sustaining procedures in certain circumstances. In most states, patients have a right to make this directive if they are terminally ill or if life-sustaining procedures serve only to postpone the moment of death. Living wills must be prepared and executed according to state law to be valid and effective. For assistance in the drafting and execution of a living will, consult an attorney.
Durable Power of attorney
A power of attorney is a legal document through which you give another individual the authority to make certain decisions or to act on your behalf when you are unable to do so. For example, if you are hospitalized, you may need someone to pay bills or access banking accounts for you.
Trusts
Used for a variety of purposes, trusts can be created and funded during your lifetime or at death. Some of the primary purposes for utilizing trusts include:
- Avoiding Probate
- Asset Protection
- Protecting Your Privacy
- Providing for a Family Member with Special Needs
- Provide for Multiple Beneficiaries and or Managing for beneficiaries who are minors
**The information provided on this site is for general reference only and is not legal advice. You should consult an attorney who is licensed to practice law in your state of residence to interpret and apply this information to your particular situation.
