If you have a current will, consider yourself ahead of most Americans when
it comes to estate planning. In fact, a recent survey found that an alarming
70% of Americans don't have this most basic estate conservation document.1
With a will, you can direct the probate courts that oversee the distribution of
your estate. You can also name legal guardians for minor children and their
inherited assets.
A will is certainly the best place to start. However, the goal of any estate
strategy should be a smooth transfer of wealth to your heirs, and it may
take more than simply having a current will.
Powers of Attorney
Powers of attorney are used to designate someone to make financial and/or
medical decisions on your behalf. Powers of attorney can be specific,
designating your agent to act for you only in certain circumstances, or they
can be general, giving your agent the authority to make any and all
decisions on your behalf. You may want to create separate powers of attorney
for finances and medical care.
Beneficiary Designations
It's a good idea to make sure that the beneficiary designation forms for
your retirement plans and life insurance policies are properly completed and
accurate. Retirement plan assets and life insurance proceeds are generally
exempt from the probate process and transfer directly to the designated
beneficiaries.
Trusts
A trust is a separate legal entity that holds your assets and distributes
them according to your wishes. Some trusts can help reduce estate taxes or
place conditions on heirs who inherit your property. Others can be used to
make charitable donations, to provide for family members with special needs,
and to help prevent posthumous challenges from disgruntled parties.
The use of trusts can involve a complex web of tax rules and regulations.
You should consider the counsel of an experienced estate planning
professional before implementing such strategies.
Even a comprehensive estate strategy may be of limited use if it is out of
date. You can help ensure the effectiveness of your strategy by periodically
reviewing your will, powers of attorney, and beneficiary designation forms
to verify that they are current.
1) LegalZoom.com, 2010
The information in this article is not intended as tax or legal advice, and
it may not be relied on for the purpose of avoiding any federal tax
penalties. You are encouraged to seek tax or legal advice from an
independent professional advisor. The content is derived from sources
believed to be accurate. Neither the information presented nor any opinion
expressed constitutes a solicitation for the purchase or sale of any
security.
This material was written and prepared by Emerald. C 2010 Emerald.
