Estate planning – something we never want to think about but is a necessity of life. Death is inevitable and unfortunately may come at an inopportune time. It is essential that you take the initiative and the time now to plan for your family’s financial well being in the event of an untimely death. This is a process about more than just writing a will for the distribution of your assets; it is a process that dives into how to best provide for your family financially ensuring that the proper power of attorney has been signed and perhaps the creation of a trust. Below are the top 4 things that you need to know today about an estate plan.
- Contents of an Estate Plan
As mentioned above, an estate plan is more than just a will. Each individual or couple’s estate plan will be different and few individuals fit into a pre-designed plan. The elements you need are based on choice, but the top three below should be considered essential.
A) Will: Wills need little explanation; this is where you distribute your assets to family members, charities, or other designees.
B) Power of Attorney: A Power of Attorney (POA) is an essential piece. After your death, someone you trust must be able to make decisions, withdraw funds from accounts to pay expenses and more. The person you select to hold your POA is important. It must be someone that you implicitly trust to carry out your instructions and
wishes.
C) Medical Power of Attorney: In the event that you are unable to make decisions regarding your health, it is vital that someone you trust is equipped with a Medical Power of Attorney so they can make proper healthcare decisions on your behalf.
D) Living Will: A Living Will is more than the Medical Power of Attorney; it allows your voice and wishes to be on record. It is here that you can indicate circumstances or timing resulting in the withdrawal of life support and other decisions. If you wish to be an organ donor, this is the place to let your wishes be known. It is also imperative that you let your family and your Medical Power of Attorney know this desire.
E) Trust: Depending on your financial goals and financial situation, a Trust can be an important part of your estate plan. Trusts reduce estate taxes and allow assets to be distributed to heirs without probate. Some trusts even protect the estate against creditors and lawsuits. Discuss this possibility with your accountant.
- Start by Making an Inventory of all Assets
This inventory of your assets must include all bank accounts, insurance policies, business interests or partnerships, real estate, investment accounts and high-value physical assets including jewelry, artwork and antiques. Take an appropriate amount of timing in completing this inventory, as your attorney or accountant to create your will and possible trust will use it. It is also a great process for considering the division of your assets.
- Discuss your Completed Estate Plan with Family Members
The division of your assets after your death and your wishes must be clearly communicated to your designated heirs. The passing of a loved one has a dramatic influence on everyone and inheritances often cause drama. Do your best to dispel any potential conflicts between your heirs before you pass. After your death, allow them to grieve without the expectations or fighting that a contested will create.
- Unlimited Medical or Educational Bills for Others are Tax Free
This little known fact is a gem. If you are financially able, you can pay the medical bills or education related bills for another individual with no limit. These distributions prior to your death are tax-free for the recipient.
For more information on Barry Bandler Accounting and Tax Services and what is advice is offered in the way of financial planning and estate planning, visit: http://www.boca-raton-accountant.com/financial-planning/ today.
