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TOP THREE ESTATE PLANNING ISSUES TO CONSIDER

Many people believe that estate planning is only necessary for the wealthy. In reality, a basic estate plan is essential for everyone, regardless of income or net worth, because we all want to minimize confusion, unnecessary costs and stress for loved ones after a death or disability. Did you know that without proper planning, assets like real estate, retirement plans, and bank accounts can end up in limbo for many years?

-Everyone should have the following three items in place:

  1. An up-to-date Will or Trust

Wills are easy to create, but they require the essential distribution of titled assets to go through probate. Probate is a legal process that involves the following:

  • Validate the will and designate an executor or personal representative to legally administer the decedent’s estate
  • Identify, inventory, and appraise the deceased person’s property
  • Pay debts and taxes
  • Distribute the remaining property as the will directs to the beneficiaries

-The probate process often requires a lot of technical paperwork and court appearances, and the resulting legal and court fees are paid from the estate’s property—reducing the amount passed on to heirs.

-A Trust has many benefits that a will cannot provide. First, when they’re structured properly, trusts will help avoid guardianship or conservatorship if you become incapacitated. A will only works after death and is not a disability plan.

-Trusts usually avoid probate, which helps beneficiaries gain access to assets more quickly as well as save time and court fees. Depending on how it’s structured, a trust can also help reduce estate and income taxes,and protect beneficiaries from creditors as well.

 

  1. A Durable Power of Attorney

-A Durable Power of Attorney is a written authorization that allows to another person to make financial and legal decisions for the person that becomes hospitalized, disabled or incapacitated.

-Not all powers of attorney are the same. It may be valid immediately when it’s signed, or it may go into effect at a later point. But what makes it “durable” is the fact that it will survive your later incapacity.

-Powers of attorney for property should only be given to trusted individuals, especially those who have the knowledge with financial and legal matters. A Medical Power of Attorney can be given to another person to make medical decisions for you in case you are incapacitated.

 

  1. Updated beneficiary designation forms.

Beneficiary designation forms on life insurance policies, 401(k) accounts, bank accounts, and other assets will generally override any conflicting provisions within a will or trust. It’s essential to make sure all forms are checked and updated regularly ideally on an annual basis.

 

 

**If you would like more information regarding these issues, please feel free to contact us!**

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