Updated: 12:35 p.m. Sunday, June 3, 2012 | Posted: 12:34 p.m. Sunday, June 3, 2012
By Cornelius Frolik
Professional advice. Find a qualified estate planning professional who will listen to you and craft a plan that works for you and your family. It’s the best assurance that your intentions will be honored.
Health care power of attorney. Before you make the big decisions about who will get your estate, you need to make other choices about who will represent your interests with doctors if you become incapacitated. You do this with a health care power of attorney. You also need a living will, which tells medical staff what to do in the event you’re placed on life support.
Financial power of attorney. This document is similar to a health care power of attorney, but it appoints someone to handle your financial affairs. This person should not only be trustworthy, but also understand something about finance or investing.
Wills and trusts. Wills are essential, simple documents that everyone should have. Trusts can be drafted in addition to wills and serve more complex estate-planning needs. Property and other assets can be placed in the trust to shield them from taxes and from probate, the lengthy and expensive court process by which wills are executed. Instead, a trustee is appointed to manage the trust. That will simplify things when you or your spouse dies.
Gifts that can reduce your estate. Although the gift-tax exemption may change in 2013, couples can for now give away up to $10 million without paying federal gift tax. Talk to your estate planner about how gifts might reduce the value of your estate, and therefore the tax paid on it.
Don’t forget your pets and digital assets. Pet owners need to have a plan for when they die so there are no questions about who will take care of the animals. Otherwise the animals can end up in shelters or being euthanized. People also own many digital properties, such as profiles on Facebook and Twitter, and accounts or files online. An estate plan should address what will happen to these assets upon death.
Source: AARP Bulletin and Rocket Lawyer
Understand the value of a plan: You wouldn’t drive a car without insurance. Similarly, having a plan for your estate is vital. This is especially important for nontraditional families, whose members may include ex-spouses, new spouses, stepchildren and adopted children. Estate plans will help prevent a major life event from creating unnecessary conflict among family members.
Know your options: There are various estate planning options available and it’s important to understand the difference between each to select those that best fit your individual needs.
Discuss your wishes with others: One of the most important elements of estate planning is discussing your wishes with your loved ones. Letting your family members and close friends know of your asset distribution plans and personal health choices can help prevent misunderstandings during an emotional time.
Remember to update estate planning documents: Once your estate planning documents are in place, you can relax, knowing your family and property are protected. But as time goes on, keep in mind that certain milestone events, such as a new birth in the family or a change in a relationship, may require you to update your documents.