Estate Planning

Estate planning involves deciding how you want to distribute your assets after you die (or become unable to make your own financial decisions).  We can give you some suggestions for basic estate planning, but you should consult a good lawyer to draw up your estate plan.  

Make a Will.  If you die without a will, the state decides who gets what, costing your family time and legal fees.  If you already have a will, update it every 3-5 years, if you move to a different state, or whenever you go through a significant life event like getting married or divorced.  A will allows you to name an executor, the person who will be in charge of your estate.  Your executor should be someone you trust completely.  And don't forget to ask if he or she is willing to take on such a big responsibility.

Make a Living Will.  Make known the kind of medical care you wish to receive, and at what point you no longer wish to receive any care.

Appoint a Power of Attorney.  Designate a trusted person to handle your financial affairs if you ever become incapacitated.

Factor Probate Into Your Plan.  Probate is the process by which the state validates legal documents and ensures they’re properly executed.  Depending on the state, this can be a lengthy, costly and public process.  There are several ways to avoid probate. Talk to an attorney and research the probate process in your area to determine if bypassing probate should be a priority.

Update Your Beneficiary Forms.  Insurance policies and investment accounts with properly completed beneficiary forms bypass probate and go directly to the named beneficiaries.  Contact you’re the companies you do business with to make sure they have updated forms, and keep copies for yourself.

Review Your Property Titles.  The legal status of your accounts, home and other assets will also determine whether they bypass probate.  For example, an asset that is “joint tenancy with rights of survivorship” will become the sole property of the surviving co-owner(s) when another co-owner dies.

Lower Estate Taxes.  If you own a significant amount of assets --- investments, cars, homes, furniture, jewelry, collectibles and other assets --- consult your attorney or tax advisor to consider strategies to lower your potential estate tax bill.  

Consider Trusts.  Trusts can be useful for avoiding probate, lowering estate taxes and providing for relatives who may not be able to manage assets on their own.  But they can also be expensive.  Talk to an attorney before agreeing to a trust.

Create a Document That Explains Everything.  Just in case something happens to you, make sure your family knows how to locate your accounts, insurance policies, legal documents, safe-deposit boxes, cash reserves, attorney information, financial planner and other trusted advisors. Include this important information in a document that you can give to someone you trust.

Review Your Plan.  Explain your wishes to family members and close friends, especially if they might have a future role to play such as executor, guardian for your children, etc.  And encourage them to get their own estate plan.  If your relatives have their affairs in order, it could spare you a great deal of difficulty down the road and keep as much wealth as possible within the family.