Estate planning is one of the most important steps any person can take to make sure that their final property and health care wishes are honored, and that loved ones are provided for in their absence. Though often overlooked or put off in favor of more immediate concerns, a comprehensive estate plan can resolve a number of legal questions that arise whenever anyone dies:
What is the state of their financial affairs?
What real and personal property do they own?
Who gets what? Does a personal guardian need to be appointed to care for minor children?
How much tax will need to be paid in order to transfer property ownership?
What funeral arrangements are appropriate?
Estate planning is the collection of preparation tasks that serve to manage an individual’s asset base in the event of their incapacitation or death, including the bequest of assets to heirs and the settlement of estate taxes. Most estate plans are set up with the help of an attorney experienced in estate law.
Some of the major estate planning tasks includes:
– Creating a will
– Limiting estate taxes by setting up trust accounts in the name of beneficiaries
– Establishing a guardian for living dependents
– Naming an executor of the estate to oversee the terms of the will
– Creating/updating beneficiaries on plans such as life insurance, Mutual Funds, etc.
– Setting up funeral arrangements
– Establishing annual gifting to reduce the taxable estate
– Setting up a durable power of attorney (POA) to direct other assets and investments
Estate planning is an ongoing process and should be started as soon as one has any measurable asset base. As life progress and goals shift, the estate plan should move to be in line with new goals. Lack of adequate estate planning can cause undue financial burdens to loved ones.