Avoiding Future Family Squabbles By Getting Started With Basic Estate Planning
Get Started with Basic Estate Planning
Once you undertake the process, decisions need to be made and once that is decided, obtaining the plan and materials becomes a simple process. Here are a few things to be aware of and a list of items to consider.
These simple steps will provide a roadmap for your future estate planning issues.
Make and execute a will: A will is merely directions you leave for how, when, and where you want your assets transferred after your death. Your will call also include special instructions regarding your “personal” goals. It can also leave guidance for minor children and the naming of a guardian.
Revocable living trusts: It may make sense to consider using a trust if you own real estate or other assets that would need a new title or deed. Trusts can help avoid the need for probate and often can reduce costs.
Health care directives: These directives will allow your heirs and caretakers to understand your wishes regarding assets and end-of-life carefully. The term “living will” is often used as a health care directive, as can “power of attorney.” A general “power of attorney” is usually to allow a trusted person to conduct and maintain your financial estate.
Assets that avoid probate: Anything that a beneficiary can be named to can avoid probate. These can include bank accounts, stock brokerage accounts, life insurance, annuities, and retirement accounts such as an IRA.
Calculate estate taxes and probate costs. Many estates will be liable for estate taxes (death taxes), resulting in needing to liquidate assets to comply with the liability. Make sure you fully understand these potential liabilities. Often life insurance is used to provide liquidity to solve the problem.
Funeral costs: Many people pre-pay estate taxes and leave specific instructions for a final service. Often, these instructions are an excellent place to keep them is with your will. It is good to inform a child or a close friend of their existence.
Safe storage: Your health directives and power of attorney should be kept secure, and trusted friends or children should know their location. Other items to keep safe could be deeds, brokerage account information, IRA information, funeral plans, general financial information, and tax returns.
Like all critical life decisions, always make sure you fully understand how things work and what effect estate planning decisions can have on your assets and goals. Always seek authorized and licensed professional advice.
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