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The Importance Of Estate Planning

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The Importance Of Estate Planning

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By Halsey Schreier

It’s that time of year, many people are trying to escape their winter doldrums by traveling to warmer weather. Traveling is exciting—whether internationally or within the continental U.S.—and there’s a lot of planning that can come with it, aside from packing and gathering all necessary travel documents. Often times, we hear from clients who are eager to get their financial plans in order just weeks before they board a flight. They want to ensure their assets are preserved, managed and distributed properly should they face the unexpected.

Having an estate plan is among the most important things you can do for your loved ones. It is, however, a task many of us dread and put off dealing with until later in life. If there is one thing we can recommend, it is that it is never too early to start planning, but it can be too late. Do you have an estate plan that will provide for your loved ones in the event of death or upon incapacity?

If you are new to the concept of estate planning, it is easy to get overwhelmed, but don’t let that deter you. An easy place to start is with the basics.

What Is an Estate Plan?

An estate plan is a collection of legal documents that sets forth how you want your assets distributed when you pass away, and how you want people to handle health and financial decisions if you are unable to do so for yourself during your lifetime.

A comprehensive estate plan can help you feel more confident about the future, knowing your loved ones will be taken care of and that the legacy you leave behind is the one you want. Thoughtful planning now can help minimize taxes and probate fees, and ensure your family will have less to worry about when you are gone; however, failing to make plans for your estate can lead to unintended complications for your descendants.

Here Are Six Essential Estate Planning Documents:

·        Will: The will is the standard document in most estate plans. The will names an executor, or personal representative, to administer the distribution of your assets as you intend. Your will can also appoint guardians of minor children who will oversee their custody and care until they become adults.

·        Living or Revocable Trust: A revocable trust holds and provides management of your assets for your benefit while you are alive and names the people who will receive the property when you die. These trusts can also help with planning for incapacity.  In some states, they also are used to simplify probate. While the living trust has advantages, some matters (e.g., funeral wishes) can only be covered in a will.

·        Personal Property Memorandum: This document (depending on the state in which you reside) allows you to gift tangible personal property items such as furniture, jewelry, artwork and other things not covered in the will. The personal property memorandum is not as formal as the will and can be changed at any time.

·        Durable Power of Attorney: This document appoints a trusted family member, friend or advisor as an agent to act on your behalf for financial and legal matters.

·        Healthcare Proxy, Agent or Power of Attorney: This document appoints someone you trust to make medical decisions for you when you no longer can, automatically giving that person access to your medical records – though some institutions may require more documentation for full access to medical records.

·        Living Will: A living will expresses end-of-life care wishes, rather than simply leaving them up to the person named in your healthcare proxy. Living wills typically cover pain relief and whether you would want a ventilator, feeding tube or resuscitation.

While it is important to have the right documents in place, there’s more to estate planning. Depending on the complexity of your estate, it may be beneficial to have a team of financial, tax and legal professionals to help guide you through the process and provide advice specific to your situation.

Also, remember to periodically review and update your existing estate plan. Drastic changes in laws, especially estate tax changes at the federal level and life changes such as marriage, divorce, or the birth or death of a family member may make it necessary for you to revise your plan.

By Halsey Schreier

Read Original Article at Forbes.com

 

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