Tips for smart estate planning
According to experts, less than half of Americans have estate planning documents. But arranging for when you leave not only takes care of the people who are left behind, it also ensures that your bills are taken care of the way you want them to be. Here are some estate planning tips that will ensure your safe and efficient exit.
write a will
If you die without a will, the state can take over and divide your assets. In general, spouses and children get the first rights, then other relatives such as parents and siblings. If there is no family, the assets go to the state. A will also determines who will have custody of your children, if you were the last surviving parent.
Review your will/trust annually
Changes in your finances or personal relationships may require a change in your final will. Since most of us don’t know when we’re going to die, dynamic changes in life may require us to update who gets what and how much. Failure to do so could lead to tension and arbitration among the surviving members.
Purchase Life Insurance
At least make sure you have the basics covered when calculating how much life insurance you may need. Consider the sum of any outstanding debt you may have, your final expenses, and funds for savings goals like the kids’ college. With these costs covered, your family should be able to live comfortably with your insurance reminder.
Create three additional critical documents
Estate planning is more than our final wishes, it also involves the creation of documents that determine what will happen in the event that we cannot take care of ourselves during our lifetime. A durable power of attorney allows you to appoint an agent to manage her finances and legal affairs.
A Release of Information form gives doctors permission to share your medical records with other designated people. Advance directives can give you power of attorney for health care decisions while you live.
Work with an estate planning team
Depending on how complex your estate is, you may need the help of a full estate planning team. Appoint a tax professional who can help minimize the amount of income tax your beneficiaries will pay on your estate. A financial advisor will create a suitable investment portfolio for all your assets.
Also be sure to hire an experienced estate planning attorney. Estate planning attorneys help create wills and trusts, as well as ensure state and federal requirements are met. It is usually best to work with a local attorney, as they are more familiar with city and state laws.