Wills, trusts, powers of attorney and advanced healthcare directives—all are components of what is known as estate planning.
While estate planning may not be something you want to think about, having a solid estate plan in place ensures that your loved ones will be taken care of after you are gone. It also helps to minimize probate costs and estate taxes.
Because every person’s estate planning needs will be different, it’s important to seek the advice of a lawyer. An attorney can let you know if a will is all you will need or if a multi-pronged approach is necessary.
If you’re ready to embark on estate planning, here are five important considerations.
1. What Is Your Ultimate Goal?
Your estate planning goals will vary depending on whether you are married, have children and own a home and/or a business. A more elaborate estate plan will also be necessary if you have extensive assets. If you have minor children, a business or estate tax concerns, a trust may be the best bet; in other cases a will may suffice.
2. Assign & Review Beneficiaries
Make sure you have assigned beneficiaries for all financial assets including Life Insurance and Tax-deferred Retirement Accounts. You can also designate your bank or stock accounts as transfer or payable on death. Exercise additional care if a trust is the designated beneficiary of a retirement plan to allow the beneficiary to continue deferring tax recognition. Review your beneficiaries any time you change jobs or experience life-changing events such as a divorce or death in the family.
3. Identify Special Bequests of Non-monetary Assets
Be sure to assign beneficiaries for things such as your car and/or jewelry.
4. Appoint a Person to Carry Out Your Wishes
Carefully select the person you would like to serve as executor of your will or your trustee. If you have minor children, you may need to appoint a guardian. Then draw up an advanced healthcare directive and financial power of attorney. Both are key in the event you become incapacitated.
5. Address Potential Tax Issues
If estate taxes are a concern, implement annual gifting to your beneficiaries. If the goal is to make charitable contributions, consider using taxable assets such as IRAs.
For more information on estate planning contact us today!Disclaimer: This is intended to provide useful tips and is NOT intended to be legal advice. You should always seek the advice of an attorney when creating a will. You can also get more information about creating a will by contacting one of the attorneys at Brunsdon Law Firm.