Is estate planning important for you? You've worked your entire life accumulating your estate, why would you let someone else determine what happens to it? Regardless of your net worth, it is important to establish a solid estate plan. You have the opportunity when you pass to decide who will get what, how they will get it, and when they will get it. If you do not make these decisions and allocate things as you would like them, then someone else will. Ask yourself if you really want an anonymous third-party telling you who should receive your assets, keepsakes, heirlooms, and memories? We strongly feel that estate planning is an essential part of every financial plan. As with other topics, we've started a collection of relevant articles on estate planning. We hope that you will find the articles informative, and urge you to not wait to begin the estate planning process.
Planning for the disposition of your home can be a challenge. From a gift and estate tax perspective, the earlier you transfer an asset to your children or other beneficiaries, the lower the tax cost. But what if you want to continue living in your home indefinitely?
There's a common misconception that owning a home or another asset jointly with your spouse or child is an effective way to transfer the asset. It's true that, when people own property as joint tenants with rights of survivorship and one owner dies, the deceased owner's interest is automatically transferred to the survivor without going through probate. But joint ownership can have significant tax disadvantages.
Many married people have never prepared a will, although they recognize that this is something that should be done. Perhaps the rather morbid title, “Last Will and Testament,” has caused them to delay taking action.
If you do not prepare a will, the state will draw one for you, and chances are very good that your survivors will not like the provisions. The legal term for dying without a will is “intestacy,” and the distribution of your property will be based on the intestacy laws of the state in which you reside at the time of death.
One of the most important provisions of a will is that which appoints an Executor for the estate. It is the Executor’s responsibility to carry out the provisions of the will and settle the estate.
Many wills name a spouse or member of the family as Executor, but the complexity of our society is making the corporate Executor increasingly popular. The Executor must do the following:
Most of us have wills that will conclude our circumstances after death. Have we also provided for the eventuality that often precedes death - incapacitation? Insurance records reveal that a 35-year-old is four times more likely to become disabled than to die before reaching 65.
If injury or illness struck you, could your family gain access to bank accounts and the safe deposit box? Is someone empowered to cash checks payable to you? How would they pay pressing bills? Could they take care of your investments, make claims on your behalf or otherwise manage your assets? A local court could appoint a guardian, or conservator, of course, but the legalities might consume time and money.