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Have you ever considered what will become of everything you own at the time of your death, or who will raise your children if they are minors? Don't assume your home, bank accounts, insurance policies, and any other assets you have will be distributed according to your wishes, or the person you want to raise your children will, in fact, be allowed to raise them. If you haven’t done the necessary planning, you don’t have control over what happens after your death.
CPA's and financial planners recommend that you develop an estate plan as soon as possible so you can transfer your property exactly as you choose. Effective estate planning may also help you minimize the taxes on your estate and maximize the inheritance for your heirs.
Components of an estate plan include, but are not limited to, the following: What is Probate?Probate is a legal process that takes place after you die. It typically involves paperwork and court appearances by lawyers. The lawyers and court fees are paid from estate property, which would otherwise go to your family members. Probate usually takes eight months to 1 1/2 years to complete and is very expensive. A probate of $1 Million in assets can cost more than $40,000 in probate fees. In addition, if anyone wants to find out how much you were worth when you died, what assets you owned and what your family will be inheriting, they only need to visit the courthouse and look at the probate file. YOU CAN AVOID PROBATE BY CREATING A LIVING TRUST
Living TrustA living trust is a document you establish to own your assets. While you still control the assets during your lifetime, the assets will avoid going through probate when you die and will be distributed to your family members. See below for a discussion of probate GuardianshipIn your will, you can specify the person who will serve as the guardian of your minor children TrusteesYou can specify who will manage your children’s inheritance, how the money is to be spent, and at what ages your children will receive the money directly. You can even set up trusts to protect your children’s inheritance from their creditors, spouses, and future estate taxes Power of Attorney for Health CareThis document allows you to name a person who can make medical decisions for you if you cannot make them for yourself Power of Attorney for FinancesThis document gives one or more people the power to act on your behalf financially if you are mentally or physically incapacitated (as deemed by a medical doctor) Living Will
These are instructions for medical care if you are unable to make decisions yourself including life support, tube-feeding, and other difficult situations. You can take these decisions of the shoulders of your family by having your wishes documented ahead of time.
Planning for your survivors should begin right away and should be reviewed periodically to make sure that your wishes are properly reflected in your estate planning documents. Contact us today to get started on planning your financial legacy!
Establishing an estate strategy is crucial, yet many wait too long to put their wishes in writing. Use this helpful guide to review your estate strategy and start conversations with your loved ones, financial professionals, and legal team.