ESTATE PLANNING 101: Why Should I Plan Now
It’s important to have a basic estate plan in place, no matter your net worth. Having a plan in place in advance provides the assurance that your financial goals and your family’s welfare are taken care of after you are gone.
Estate planning is the advanced process of planning, anticipating, and arranging for the disposal of your estate. Planning eliminates uncertainties over the administration, and it also addresses probate and maximizes the value of your estate by reducing taxes and other related expenses. Guardians can be designated for named minor children and beneficiaries in estate planning. Estate planning has many elements, including your will, your power of attorney, your living will or your medical power of attorney.
Trusts aren’t just for the wealthy. They are legal documents that allow you to put conditions on how and when your assets will be distributed to your heirs. They also allow you to reduce estate and gift taxes. They allow you to distribute your assets to your heirs without the cost and delay of probate court. Discussing your estate plans with your heirs in advance can prevent disputes or confusion. Inheritance can be a charged issue. By being clear about your intentions, you help take care of potential conflicts after you’re gone.
Ask yourself three very critical questions about what you want. Who inherits your assets? Who handles your financial affairs? Who makes medical decisions for you if you can’t? In addition, an estate plan can defer the hard decisions about the distribution of your assets until your spouse’s death.
Estate planning requires the expertise of a professional. They can help show you the ways to give charitable gifts that keep on giving. If you donate to a charitable gift fund or community foundation, your investment grows tax-free and you can select the charities to which contributions are given both before and after you die, so it’s important to know all the rules.
When you put a trust in place, it provides the assurance that your financial goals and your family’s welfare will be taken care of long after you are gone.