Estate planning is not only for someone else or for some other time. Now is the time to put into place the safe-guards that will ensure that your family and finances that you’re working so hard for are protected. These are decisions that will be made, the question is whether they will be made by you or left to the whim of others and outside agencies. What makes the difference is planning now. Take some time to consider these things when creating an estate plan.
• Everybody needs a will. It informs the world exactly what you want done with your assets. If you have children, it’s also the mechanism for determining who will be their guardian in the event of your passing. This can also be the same person that you would like to appoint to manage any assets that you leave to your children, should they be too young to do so themselves.
• Trusts are basically how you put conditions on how and when your assets will be distributed. It also provides a financial benefit to your remaining family by reducing estate and gift taxes, as well as the delay and publicity of having to resort to a probate court. Another way to avoid the probate process with your funds is to name a specific beneficiary for things like bank accounts and retirement plans, making them automatically “payable on death” to whomever you chose.
• If you ever become incapacitated or unable to speak for yourself, having a durable power of attorney for finances will provide someone who can make the decisions that you will no longer be able to. By appointing someone that you trust ahead of time, you can rest assured that what you would have wanted will indeed be carried out.
• It seems that everyone has financial obligations. You can make sure that yours don’t become an additional burden for your loved ones by having a life insurance policy in place, to cover the expenses of meeting those obligations.
• Did you know that any assets that you leave to your spouse or to a tax-exempt charity are exempt from taxes? Taking the time to understand estate tax laws can assist you in making plans that will be to the greatest benefit of your loved ones and make the most of what you leave for them.
• Perhaps you want your body to be cremated instead of buried, or maybe even donated to science. For your wishes to be carried out, you need to make those decisions now. Also, think about how to cover the costs of those wishes. By depositing the necessary funds into a payable-upon-death bank account, you will provide the needed money to pay for funeral arrangements and related expenses.
Once you’ve made and documented all of these decisions, make sure that they’re accessible to those who will need them, particularly your attorney-in-fact and executor.
When you pass, it will be the time for your loved ones to comfort one another, to reflect on you and your life, and to appreciate the legacy you’ve left behind. You can help them to do that, and prevent unnecessary confusion, anxiety, and hassle, by taking the time to make these arrangements now.