There are a few things you should do now.
But if you don’t plan for it, don’t worry…..
Uncle Sam will be happy to help!
Estate planning is the process of planning for the disposal of property during life, at death, and after death in a manner that best carries out a person’s desires, while minimizing income, gift and death taxes. The following list contains common matters you need to arrange for, part of a comprehensive estate planning package.
5 STEPS TO PLANNING YOUR ESTATE
A — PREPARE A WILL
A will at a minimum should cover:
Common Problems found in wills include:
Naming the wrong executor/personal representative
- Such as a family member who may lack expertise. Besides handling the estate in a manner consistent with your wishes, the executor is personally responsible for the estate-tax filings and if done improperly may be liable for the estate taxes. Family members are often too emotionally upset to do a competent job and may not be able to make tough decisions.
- Naming a lawyer can be a problem if the attorney is not privy to important details of estate.
- Not informing the person you have named as executor is another common problem. Be sure they want and will take the job.
- The Executor, or what is now commonly known as the Personal Representative, may not understand or be aware of all the related duties of the job.
- Tax law changes occur all the time. Check this annually.
- If you move to another state the laws of the new state will take precedence.
- Changes in bequests and/or assets must be noted and accounted for.
Storing your will in an inaccessible place
- If you use a safe deposit box you could cause your heirs a lot of trouble since these are routinely sealed upon death in some states.
- Fire-safes without keys or unknown combinations hamper the process.
- Simply storing the will in any unknown location may cause the state to step in and take control, under the false assumption no will exists.
B — LIMITED POWER OF ATTORNEY
Durable Provision — This designates someone to handle your finances if you can’t.
C — DURABLE POA FOR HEALTH CARE
Similar to the limited, this designates someone to make health care decisions if you become too ill to do so yourself.
D — LIVING WILL
This states your wishes concerning life-prolonging medical procedures, relieving loved ones of the trauma of having to make life and death decisions for you. This is also where you would specify if you wish to be an organ donor and which organs you would make available.
E — ESTATE PLANNING
Ask a tax or estate planning professional for examples of what to do and what to avoid to insure your wishes are met and tax consequences are kept to a minimum. First, you will need to find out if you have a problem. Then meet with an accountant, attorney, etc. to chart a course of action.