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Money, Insurance & Investments for Seniors
Ten Reasons to Face Your Mortality and Create an
Estate Plan Now
Must include two important instruments: a durable
power of attorney and will
 Dec. 3, 2007 - Knowing we will die is something
that seems to distinguish humans from other living creatures, yet, no
one likes to dwell on the prospect of death. This possibly explains why
many postpone planning for their demise, which increases the risk that
loved ones may not receive what the dying had intended. This is why
estate planning is so important, according to ElderLawAnswers.com, no
matter how small your estate.
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Estate planning allows you, while you are still
living, to ensure that your property will go to the people you want, in
the way you want, and when you want. It permits you to save as much as
possible on taxes, court costs and attorneys' fees; and it affords the
comfort that your loved ones can mourn your loss without being
simultaneously burdened with unnecessary red tape and financial
confusion.
All estate plans should include, at minimum, two
important estate planning instruments: a durable power of attorney and a
will.
● The first is for managing your property during
your life, in case you are ever unable to do so yourself.
● The second is for the management and
distribution of your property after death. In addition, more and more,
Americans also are using revocable (or "living") trusts to avoid probate
and to manage their estates both during their lives and after they're
gone.
Many people think that estate plans are for someone
else, not them. They may rationalize that they are too young or dont
have enough money to reap the tax benefits of a plan. But as the
following list makes clear, estate planning is for everyone, regardless
of age or net worth.
1. Loss of capacity. What if you become
incompetent and unable to manage your own affairs? Without a plan the
courts will select the person to manage your affairs. With a plan, you
pick that person (through a
power of attorney).
2. Minor children. Who will raise your
children if you die? Without a plan, a court will make that decision.
With a plan, you are able to nominate the guardian of your choice.
3. Dying without a will. Who will inherit
your assets? Without a plan, your assets pass to your heirs according to
your states laws of intestacy (dying without a will). Your family
members (and perhaps not the ones you would choose) will receive your
assets without benefit of your direction or of trust protection. With a
plan, you decide who gets your assets, and when and how they receive
them.
4. Blended families. What if your family is
the result of multiple marriages? Without a plan, children from
different marriages may not be treated as you would wish. With a plan,
you determine what goes to your current spouse and to the children from
a prior marriage or marriages.
5. Children with special needs. Without a
plan, a child with special needs risks being disqualified from receiving
Medicaid or SSI benefits, and may have to use his or her inheritance to
pay for care. With a plan, you can set up a
Supplemental Needs Trust that will allow the child to remain
eligible for government benefits while using the trust assets to pay for
non-covered expenses.
6. Keeping assets in the family. Would you
prefer that your assets stay in your own family? Without a plan, your
childs spouse may wind up with your money if your child passes away
prematurely. If your child divorces his or her current spouse, half of
your assets could go to the spouse. With a plan, you can set up a trust
that ensures that your assets will stay in your family and, for example,
pass to your grandchildren.
7. Financial security. Will your spouse and
children be able to survive financially? Without a plan and the income
replacement provided by life insurance, your family may be unable to
maintain its current living standard. With a plan, life insurance can
mean that your family will enjoy financial security.
8. Retirement accounts. Do you have an IRA
or similar retirement account? Without a plan, your designated
beneficiary for the retirement account funds may not reflect your
current wishes and may result in burdensome tax consequences for your
heirs (although the
rules regarding the designation of a beneficiary have been eased
considerably). With a plan, you can choose the optimal beneficiary.
9. Business ownership. Do you own a
business? Without a plan, you dont name a successor, thus risking that
your family could lose control of the business. With a plan, you choose
who will own and control the business after you are gone.
10. Avoiding probate. Without a plan, your
estate may be subject to delays and excess fees (depending on the
state), and your assets will be a matter of public record. With a plan,
you can structure things so that probate can be avoided entirely.
Last Updated: 11/26/2007
>>
Read updates on this story at ElderLawAnswers.com.
>> For more information on estate planning, see
ElderLawAnswers.coms Estate
Planning section.
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