Estate Planning for You
What Happens Without an Estate Plan?
If you die without an estate plan, without will or trust, you are “intestate,” and a probate court system will apply the intestacy laws of the state where you reside to determine how to distribute your property among your next kin.
Every state applies its own intestate succession laws to determine who your heirs are and how to distribute your assets. Probate can be a very costly and time-consuming process.
What is an
Estate Plan?
If you have possessions, you have an estate. You might assume that estate planning has nothing to do with you personally, except to see that your property is taken care of when you are gone. This outlook represents a common error.
Smart estate planning involves a generous amount of financial management during your lifetime. As you grow older and your assets increase, you may want to lighten your own responsibilities while ensuring that in the event of sickness or disability, your investments will be managed prudently, and your financial obligation met. While planning for the future needs of others you can employ vehicles that offer lifetime advantages for wealth transfer.
8 Essential Estate Planning Tools:
- Your Will – This document disposes of your property held in your individual name to your beneficiaries at death through a court process call probate. It also names the executor whom you want to carry out the terms of the will and a guardian for any minor children.
- A Revocable Living Trust – This is an arrangement for the management of your assets. It is a fiduciary relationship in which the trustee holds the title to property (the trust holds title to property (the trust principal) for the benefit of another (the beneficiary) during the trust term.
- Durable Power of attorney for finances – This document ensures that someone you trust will have legal authority to take care of financial matters if you cannot. The term “durable” means the document remains effective if you become incapacitated.) The tasks range from paying bills to filing taxes.
- Living will and health care power of attorney – These documents explain your health care wishes. A living will direct your doctor to withhold or withdraw life-prolonging interventions if you are terminally ill or permanently unconscious. A health care power of attorney allows you to name a person to make decisions for you.
- Life Insurance Policies – These provide for payment of the face value to your designated beneficiary upon death. This beneficiary may be an individual, a trustee of a charity. Or you can have the proceeds held by an insurance company for payment of either interest or fixed installments to your beneficiaries.
- Retirement plan accounts and employee benefits – These include IRAs, Pensions, Government Plans, TSP, 401 (k), 403 (b), Deferred Compensation Plans, group life insurance and stock options. They all have written provisions for their disposition upon disability, retirement or death. Social Security can also be an important benefit at such times.
- Charitable Legacy Blessing Plan
- Final Arrangements
