Not really ready for an estate planning talk around the fire this holiday season? It's definitely not a pleasant conversation when considering the end of one's life. Yet, if you could give your family the gift of "peace of mind", would you? Probably so. What does this gift look like?
The Street’s recent article, “The best holiday gift for your family: estate planning,” gives us a quick checklist of estate planning essentials:
Wills and Trusts. These legal documents state how you'd like to distribute your estate after you are gone. You can also appoint a legal guardian if you have minor children. Without a legal will that’s up-to-date, your assets might be divided by the probate court according to state law, rather than how you would want. Dying “intestate” can create problems for your heirs, and it can be a long and expensive process.
Living Trusts. Some people prefer creating a living trust. A living trust is a legal document that places your assets into the trust for administration during your lifetime. You can name yourself as the trustee and even appoint someone else in the event you become incapacitated. When you die, the assets are transferred to your beneficiaries as you provide. The great thing about a living trust is that it is much more difficult to challenge by a claim on your wealth. Also, a living trust isn’t a public record, so your privacy is protected, and your wealth can be divided up without state oversight.
Living Wills. If you become seriously ill and are unable to make decisions for yourself at the end of your life, you will be glad you have a living will. This, along with a health care directive and power of attorney, will make sure your medical care is as you wish.
Powers of Attorney. Estate planning attorneys will advise you to have a trusted individual who can handle your finances, property and other decisions if are disabled and are unable to take care of your own affairs.
Life Insurance. If you own a home with a substantial mortgage and have young kids, you want to make sure you have enough life insurance to pay for their educational expenses.
Crucial documents. The original article also advises that you make sure your spouse, family, and estate planning attorney know the location of the documents they need to execute your estate according to your wishes.
So be jolly this holiday season, and take these important, practical steps to make sure your estate passes easily to the next generation when needed.
Reference: The Street (December 4, 2014) “The best holiday gift for your family: estate planning”