Estate Planning

Overview

Estate planning usually connotes ‘having a Will’, but the concept of estate planning is to provide an orderly transition of your assets in the event of your death or disability. Our version of estate planning is to overcome four barriers:

• Probate, which is generally costly in both time and money;
• Taxes, either income taxes or state and federal death taxes;
• Control, to provide some governance over money to heirs;
• Disability, to have someone protect you in the event of disability

You need to consider your goals and objectives: Who do you want your money to go to on your death? Who will control the money? When should your heirs get the money?

Organize Your Information

A first and simple step of estate planning is to organize all of your information. Make a list of your valuable papers. Make a list of all insurance policies and beneficiaries. Be sure you have primary and contingent beneficiaries listed. Find and look at the deeds on your real estate, and make sure the title is correct.

Goals and Objectives

The next part of the process is to create documents to meet your goals and objectives. Everyone should have a Power of Attorney for both financial matters and for health care. A Durable Power of Attorney allows someone to act in the event of your disability. The Financial Power of Attorney allows someone to conduct your financial affairs, take care of your children, and take care of assets. The Health Care Power of Attorney allows someone to hire and fire health care professionals, allow or withhold treatment and make decisions regarding your life. A Will is a written set of instructions for the Personal Representative and/or the probate court. The Will distributes property and also will designate a guardian for minor children. Sometimes, adding a Living Trust may be necessary. A funded Revocable Living Trust holds your assets under your full control, and then distributes them according to your instructions, free from probate court interference.

Funding Your Estate Plan

Many times, we see elaborately constructed estate plans that don’t take the final step: funding the plan. When you create and execute an estate plan, all of the assets should be titled and administered in accordance with the plan. Real estate should be deeded, beneficiaries should be potentially changed, accounts may need to be re-titled. In addition, you should have a method to always add new assets to the estate plan. They say two things in life are certain: death and taxes; and an effective estate plan can get your assets to your heirs much easier in the case of the first event.