Estate planning involves determining how an individual’s assets will be preserved, managed, and distributed after death. It also takes into account the management of an individual’s properties and financial obligations in the event that they become incapacitated, as well as setting up guidelines related to health care decisions.
Assets that could make up an individual’s estate include houses, cars, stocks, artwork, life insurance, pensions, and debt. Individuals have various reasons for planning an estate, such as preserving family wealth, providing for a surviving spouse and children, funding children’s or grandchildren’s education, or leaving their legacy behind to a charitable cause.
The most basic step in estate planning involves writing a will. Other major estate planning tasks include the following:
• Limiting taxes by setting up trust accounts in the names of beneficiaries
• Establishing a guardian for living dependents
• Naming an executor of the estate to oversee the terms of the will
• Creating or updating beneficiaries on plans such as life insurance, IRAs, and 401(k)s
• Setting up funeral arrangements
• Establishing annual gifting to qualified charitable and non-profit organizations to reduce the taxable estate
• Setting up a durable power of attorney (POA) to direct other assets and investments
• Setting up a health care directive to decide who will make decisions on your behalf in the event of incapacity
A living Trust is often recommended in order to avoid the hassle of going to Probate Court and prevent unnecessary federal and state taxes which can considerably reduce value of your Estate before assets are distributed to beneficiaries. Living Trusts provide other interesting advantages so please call our office for a consultation to determine what option is best for you and your family.