There are a variety of tools from which you can construct your estate plan, including wills, life insurance, and trusts. It is important to discuss these tools with your tax and legal advisors.
1
A Properly Executed Will is the First Step
Properly executed wills are the foundation of most solid estate plans because they designate how and to whom your property will be distributed after death. If you don't have a will, you give up your right to distribute your property as you wish. Assets owned jointly or that have beneficiary designations, such as life insurance, annuities, or retirement accounts, are not controlled by your will. However, they are included in your taxable estate.
2
Wills are Not Only For the Rich
Wills are not only for the rich. Wills are the primary documents for transferring wealth upon death. If you die without one, state law controls the disposition of your property. In addition, without a will, settling most estates can be more troublesome - and more costly - for beneficiaries.
3
Three Major Provisions That You Should Consider Including in a Will Are
1. Guardian for your children. A will should name a guardian for minor children in the event that both you and your spouse die. Selecting a guardian requires careful thought; be sure the person you elect is willing and able to accept this responsibility.
2. Creation of trusts. A will directs the disposition of your estate. To accomplish longer-term goals, such as funding a child's education or providing for an elderly parent, you may need to include instruction for the creation of trusts at your death.
3. Naming an Executor. Your executor is your personal representative after your death. He or she has several major responsibilities, including administering the estate and distributing assets to beneficiaries; making certain tax decisions; paying debts/expenses of your estate; ensuring all life insurance and retirement plan benefits are received; and filing necessary tax returns and paying the appropriate federal and state taxes.
4
People Often Think They Can Use a "Do-it-Yourself" Will
Estate, probate, and tax laws are complicated, and, in most cases, only a lawyer experienced in these areas knows how to use the legal terminology designed to protect you and your interests. You should work with your attorney to develop a will that can protect you effectively.
5
You Should Also Be Sure to Review Your Will Periodically. It May Need Revising If
1. You move to a different state
2. Your financial situation changes
3. You add another dependent, be it a child or aging parent
4. You make a change in your life insurance
5. Your heirs change marital status, have children, or die
6. Your guardianship plans change
7. You acquire property in another state
8. You inherit or purchase property
9. Your property increases substantially in value
10. There is a change in tax laws
Comments - add comment