As described on the Financial Planning page, estate planning is a significant part of financial planning,
Links referred to on this page:
wealth accumulation and wealth transfer. We realize that for many of you, the word "wealth" feels out of reach or a concept that doesn't apply to you. Well, that just isn't true.
 
At the present time, the amount exempt from estate tax is increasing annually to an unlimited number just to come back down to $1,000,000 in 2011, when all of the current provisions are expected to "sunset" (aka go away). So, unless you are planning to die before 2011, proper planning is essential to find ways to make sure that your estate is passed on at the highest value possible.
 
"My estate is not large enough to worry about this." you say. Make sure that you are considering all of your investments - both retirement and non-retirement, your residence(s), and, worst of all, any life insurance in which you are the owner. Assuming you are properly insured, if you have not done the proper planning, getting to $1,000,000 with all of these items is not as difficult as you think.
 
A substantial opportunity in estate planning is the creation of an irrevocable life insurance trust. Again, you may not think this applies to you but consider whether or not your beneficiaries will have the mental and emotional capability to handle the life insurance proceeds at the time they collect (consider the worst here). A trust can be set up to provide support for a child, grandchild or a relative with special needs.
 
In addition to trying to minimize the estate tax payable upon either your death or the death of your spouse, there are other estate issues that you may want to address while you are alive. Issues such as:  
  • Who will be the guardian of my (our) children, should something happen to both of us?
  • Who will manage my affairs if I am mentally unable to make such decisions?
  • Who will make the decision to take me off life support if I am put on it?
  • At what ages would I want my minor aged children to have access to my (our) estate, if we died before they reached a major age?
  • What will happen to my child's portion of my estate if they should get divorced?
  • What exactly happens when you try to settle an estate and what about probate?
  • ... and so many more issues! 
These, and many more issues, are exactly the types of issues that are dealt with when working with the proper estate planning attorney. Although we are not attorneys, we have many years of experience working with these types of issues and the decisions you will have to make. As a result we will work with either your own estate planning attorney or, if you are interested, you can work with our alliance partners specializing in estate planning. Regardless of which route you go, please make sure you address the completion of the following essential estate documents for both you and your spouse (if there is a spouse):
 
Essential Estate Documents
  • Wills - outlines the details of what is to happen upon your death (i.e. guardians for children, disposition of property, executors, etc.) 
  • Living trusts - created for the purpose of holding ownership to your assets during your lifetime and distributing upon your death. This provides tremendous estate tax minimization and probate protection and should be done at virtually any level of assets 
  • Health care power of attorney - setting out your wishes for health care, if you are ever too ill or injured to speak for yourself 
  • Durable power of attorney - giving somebody the legal right to manage your property while you are incapacitated 
  • Irrevocable life insurance trust - this allows for life insurance to pass to heirs without estate tax and allows for protection of money paid to young heirs
  • Survivor(s) Information Listing - this is a document that summarizes ALL your financial and non-financial information about you and your spouse (if any) so that your survivors do not have to scurry around to locate everything. This may take a bit of energy on your part but will help your heirs tremendously.
Please consult an advisor for legal advice or contact us if you would like to find out more information about relevant estate planning for you and your family. If you would like to get started on this process, please start by completing as much as possible of this Estate Planning Questionnaire.
 
Please go back to Financial Planning to learn more about the other steps suggested prior to starting this process.