Estate planning is a method for determining how to distribute your property during your life and at your death, which varies with each person.
In a recent article, “Business viewpoint: Estate planning important tool after your death,” The Tulsa World says that everyone needs a plan for the distribution of their assets after death according to their wishes. Another reason to have an estate plan is to avoid probate, which can be expensive and time-consuming. All of the information is also in the public record, so anyone can see the details of your financial affairs.
Prior to speaking with an experienced estate planning attorney, take some time to think about these questions:
- Who you want to inherit your assets, such as your kids, grandchildren, or your favorite charity?
- If you own your business, who is going to succeed you?
- Who will manage your affairs, if you’re unable to do so?
Younger parents should also think about who would care for their children. If there are special personal property assets like grandma’s silver or a valuable baseball card collection that you’d like to see go to a specific individual, you should make a list for these gifts. Speak with your estate planning attorney, who will suggest available strategies and assist you in creating and implementing your estate plan. Many people think that a will is all you need in an estate plan. However, you really should have these four basic estate planning documents:
- Last will and testament provides direction on how your assets should be dispersed. You should nominate an executor or a personal representative, as well as a guardian, if you have minor children.
- Power of attorney is a legal document that authorizes another person to act on your behalf, called the attorney-in-fact, should you become incapacitated. He or she has to be the age of majority. It ends at your death.
- A health care directive and health care power of attorney lets an individual who you select, make decisions on your behalf on health issues, such as whether to withhold future medical treatment and whether or not to use medication and/or provide life-sustaining care.
- A trust is a legal entity created when you transfer property to a trustee for the benefit of another, the beneficiary. By placing your assets in a trust, you can avoid probate. You select the beneficiary and the trustee. A trustee manages the property for the beneficiary in accordance with the terms of the trust document.
Once you’ve created these four documents for your estate plan, you might think you are done, but you need to fund the trust.
Make sure to review your plan periodically, particularly if a significant life-changing event occurs. In that way, your estate planning documents will have your wishes and intentions up-to-date.
Reference: Tulsa World (December 11, 2016) “Business viewpoint: Estate planning important tool after your death”