Friday, January 23, 2015

Estate Planning: How to Tackle This Vital Part of Your Personal Finances

Estate planning should be part of everyone's financial goals for a secure future. No matter a person's income level, outstanding debt, or family status, an estate plan will determine the disposition of a person's assets at the time of their death. Here are some key points to keep in mind.

Consult An Attorney


An estate planning attorney, or one that specializes in wills and trusts, can help you go over your financial affairs and plan for the future once you are gone. Whatever you own at the time of your death must be disposed of in some manner. Normally the assets will go to the family members or friends who are named heirs, but that is up to you to decide. It is better for an individual to make this decision beforehand than to let the court make decisions after the person passes away.

Appointing an attorney to act as executor of your will is an excellent way to ensure your intent for the division of your estate is carried out in an impartial, accurate manner. Doing this removes a lot of potential stress from your family members down the road and can spare a lot of hurt feelings, misunderstandings and even legal disputes. 

Take Stock of Your Assets


In preparation for writing your will and making an estate plan, it is a good idea to make a comprehensive list of all your current and anticipated assets, or belongings. These include property, bank accounts, furnishings, personal effects, vehicles, stocks and investments, and cash, among other things. The list should include the current or future holder's or institution's name. For example, indicate that your father has promised to give you an antique vehicle if he predeceases you—it’s always better to put anything you want to be legally binding in writing. 

Summarize Your Debts


Similar to listing assets, review your current and probable future debts, such as the balance on a home mortgage or the kids' college tuition, if you expect these to be long-term obligations. Include projected expenses like funeral costs and bequests to loved ones, if assets are available for this purpose. During this step, start forming plans to tackle these and existing debts. Make sure your debts will be paid off or settled, as this will make the handling of your estate much easier for others, when the time comes. In most cases, the debt of the deceased cannot be inherited by their survivors, though in some cases collectors can legally try to collect from your beneficiaries. 

Consider Your Beneficiaries


In addition to your spouse and any biological or step-children, you may want to include adopted kids, foster children, or close friends. Extended family members can be added, as well. Some people designate funds for churches, charities, or universities. Much like making a will, this part of your estate plan will help you organize who will get what. It’s best to go about this over the course of a few years, so you’ll have time to really think about who your beneficiaries are and in what capacity you’d prefer them to inherit from your estate.

Your estate planning attorney can advise you about death taxes and other fiscal responsibilities or costs that may apply when you pass away. Having everything prearranged with a living will, a will, a funeral plan, and an estate plan can make it easier for your loved ones to carry out your final wishes and transfer property and assets to those who should get them, while paying any outstanding expenses.

Informational Credit to Rutter and Sleeth Law Offices

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