No matter who you are it is probable that you have an estate. Even if you don’t think you do, you most likely do. An estate is made up of all of the things you own on your own including: your car, home, checking & saving accounts, investments, life insurance, furniture and personal possession. No matter how large or small you have an estate and all estate has one thing in common, you can’t take it with you when are gone.
We are all going to eventually die that fact is inevitable. Many people say they don’t care how things are distributed after they are gone but in reality that is most likely untrue as well. There are certain people that you will want to have certain personal items. In order to be sure that your wishes are carried out it is crucial that you provide written instructions stating who you want to receive your estate, what you want them to receive and when they should receive it.
This is known as an estate plan. Creating an estate plan where your estate is distributed in the most efficient manner possible helps avoid additional tax, fees and court expenses. An estate plan is created in advance of your passing and is used to name who receives your estate after you die. A good estate plan will also include:
Instructions in an estate plan should not only include your property with value but also instructions on your personal values. A written document stating your values on religions, education, hard work, holiday traditions and what matters most to you.
Detailed instructions should be included on how you hope to be cared for if you should become disabled before you die. What type of care do you hope to be given during this period of time between when you become disabled and the end of your life?
Your estate plan should name a guardian and financial manager for children under the age of eighteen. Who do you want to care for them? Do you want the guardian of your children to also be in charge of your financial assets?
How do you want to distribute money to loved ones that may not be able to manage money or may need financial assets later in life?
State the instructions for family members needing special care in order not to disrupt government benefits that are being received.
Include details on life insurance and how it is to provide for your family at the time of your death. Written details on disability insurance that replaces your income if you are unable to work due to illness or injury before death. Also, include long term care insurance instructions to ensure you can pay for care in cases of extended sickness and injury.
Estate plans need to also contain information on how your business should be transferred upon your retirement, disability or death.
An estate plan should establish a transfer of assets that minimizes legal fees, court costs and works to minimize the amount of taxes paid.
Proper estate planning is a continual process. Continue to update the estate plan as events in your life change. Set up a regular yearly appointment with your estate planning attorney to review and update the plan to ensure that your family is covered when you inevitably pass away.