Wassana
What is estate planning? Last wills and testaments are critical documents in the administration of your estate. They are the legal instruments needed for allocating your estate, picking your heirs, choosing the guardian and safeguarding your property from endless courts battles. Even then the last will is a part of an estate plan. It’s not an entire estate plan. Besides the last will and the testament, it should also have an advanced directive on health care, a power of attorney, and trust for the heirs.
Step 1: Create & Sign a will
In the checklist for estate planning, you will need a will through which you will allocate portions of your wealth to your kids. You will, therefore, need an executor who will distribute the wealth. In the absence of a will, your property will pass to your survivors based on your state’s laws of intestacy. The sad bit is that even with the confusion that comes with death, successive studies show that very few people write a will. What makes this disheartening, is that the cost of making a will with a solicitor is pretty small.
Step 2: Name beneficiaries
Different assets have different legal nature when it comes to inheritance. Joint properties are subject to division of ownership before your heirs get their share. Financial products including savings account are handed over to the heir that you quoted on the forms. This also affects your savings, individual retirement accounts, and life insurance policies. Always show the forms that you filled for your beneficiaries to your attorneys for review. You might alter the list of beneficiaries every few years depending on how relations change.
Step 3: Dodge Estate Taxes
Depending on the laws of a nation there are different ways of minimizing or getting exempted from certain taxes. For example if a husband and wife each have $1 million in assets and the husband dies first leaving everything to his wife, no estate tax is due. When she dies, leaving $2 million to their heirs, no tax is due because her estate can use a portion of the husband’s unused exemption. This strategy is applicable only if the wife files an estate tax return for the husband’s estate within a set period after death, even if no tax is due.
Step 4: Leave A Letter
There are lots of issues you might want to raise at the end of your life that are not admissible in a will. Such things including sentimental items, legacies, personal feelings, and desires which can be written in a separate letter. You can then hand the letter to a trusted relative, wills and estates lawyer, or friend who will bring it up during the administration of the estate. This should not involve any item or issue covered by the legal statutes of your state since it might not be implemented.
Step 5: Draw Up a Durable Power Of Attorney
Unlike a simple power of attorney, a durable power of attorney (DPA) appoints a friend or relative, to manage your finances when you can no longer provide guidance and direction. This secures your property in the event that you are incapacitated. In the absence of a DPA, a relative will have to compel the courts to appoint a guardian or conservator. Some financial institutions have their own DPAs, and it’s often advisable to use them rather than designating a different DPA on your own.
Step 6: Draft an Advance Health Care Directive
You will need to sign a living will as well as a DPA for health care which will stipulate the kind of medical care you’ll receive as you near your death. In it, you can stipulate the kind for procedures you are open to and those that you do not want to be administered by your healthcare provider. You will also be able to appoint for yourself a health care agent. You should sign a health records release form so that your health care personnel can release your medical records to your health care proxy.
Step 7: Secure Your Digital and Paper Files
It’s very critical that you consider proper safekeeping of these documents including financial records. Keep your original documents at a bank safe or a lawyer’s vault or a home safe in which you are a co-owner with a trusted confidant. These documents and paperwork include insurance policies; burial plot; your bank statements, pension & any other employee-benefit information, brokerage house, and mutual-fund accounts. The other paperwork includes a list of your assets, contacts of your legal team, inventory of home safe, and the location of your financial advisers.
