Estate Planning
Understanding basic estate planning is the key to building your dreams and strengthening your legacy.
An estate plan can be as easy as drafting a simple Will, or as complex as establishing several different types of trusts to serve different purposes.
There are four places your wealth can go by the time you pass away:
- You have spent it all.
- To your loved ones (hiers).
- To the Internal Revenue Service (IRS).
- To charity.
How your wealth will be distributed among these four areas will be determined by the steps you take, or don't take, to strengthen your legacy now.
Estate Planning - Not Just For the Wealthy
When most people think about estate planning, they dismiss it as something only for the wealthy. The truth is, estate planning is important for anyone who wants to preserve a legacy for loved ones. Have you recently gotten married? Do you have children? Are you thinking about retirement? These are all good indicators that it's time to create an estate plan. If you have property - a house, a collection of jewelry, liquid assets - you need to plan for what will happen to those assets after you pass away.
Estate planning also includes taking steps that may be important for you family's security while you are sitll living. For example, a basic estate plan should include completing documents that may be activated when you are incapacitated, or suffering a severe medical condition. Documents would include a durable general power of attorney, a health care power of attorney, and perhaps an advance medical directive ("living will"). An estate plan can help protect the assets you have worked hard to build from unnecessary costs and excessive taxes.
Estate planning includes the steps for the administration and disposition of your property after you pass away. Most people are uncomfortable witht the question, "What would happen if I died today?", but creating an estat plan now can give you and your family peace of mind when faced with that reality.