Your Estate Plan information is vital preparation for life and retirement.
Estate Plan information is one of the most important things you can do for yourself and your family
Why do I need Estate Plan information? Simply because, "if you fail to plan, then you plan to fail". This old saying is very true. Would you build a house without a plan? Of course not, yet most people spend more time and effort planning their next vacation than they do planning their financial future and eventual retirement! This is extremely short sighted, to say the least.
What is an estate plan? An integrated Estate Plan includes taking stock of what you have, planning for the management of your assets and health in case of your incapacity, and the final instructions in your will. The estate plan information can also include tax planning guidance and strategies to minimize inheritance taxes. Preparing your personal Estate Plan is one of the most important things you can do for yourself, your spouse, and family. It is a critical step in preparing for Baby Boomer retirement.
Your personal Estate Plan is a matter of life and death! Your integrated Estate Plan information is literally a matter of life and death for you. It can also spare you and your family enormous grief, heartache, unnecessary taxes, and potentially ruinous expense if it is thoughtfully crafted.
What is an integrated Estate Plan? There are five essential legal documents in the basic Estate Plan information. They are:
• Will
• Living Will
• Health Care Power-of-Attorney
• Durable Power-of-Attorney
• Living Trust
The form and substance of these legal documents differs significantly from state to state, and it is critical to use the correct documents that will be valid in your jurisdiction. The requirements for witnesses or notary attestation also vary from state to state and it is essential to have the proper format.
Fortunately, it is now easier than ever to develop your own legally valid estate plan, quickly and economically.
Online legal document preparation
services and specialty software are readily available and very affordable. These tools can produce a valid estate plan within just a few hours. In the event that you have a more complex situation and feel you need to consult an attorney and/or tax adviser to prepare a more customized plan for your situation this initial plan can serve as the basis of a more detailed plan. If you do not have an estate plan now, I urge you to get started with one of these services.
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The "Will" gives final instructions about the care and support of minor children and the distribution of your assets to family, loved ones, charities, etc. after your death.
A word of caution; the instructions in the will are generally subordinate to beneficiary designations in investments, retirement accounts, and insurance policies, so be sure each of those accounts reflect your wishes as stated in the Will. Please understand this point. If there is a discrepancy between your will and the named beneficiaries in these asset accounts, you may have left a "time bomb" in the estate plan that can potentially cause litigation and hard feelings among your family and heirs. That is not your intent, so remember, the "devil is in the details."
A Living Will is a legal document that clearly and unequivocally expresses your wishes regarding the use of life-sustaining measures in the event of a terminal injury or illness, assuming you are incapacitated or unconscious and unable to give instructions personally. Do you want to "live" on life support, or die with dignity after reasonable efforts have been made to save your life. This is a very tricky subject to consider, and requires great care and thought in expressing your wishes. It must used in concert with a Health Care Power of Attorney because a living will alone does not give anyone else the power to act for you.
A Health Care Power of Attorney grants another person legal authority to act on your behalf in decisions about your health care in the event you are incapable of making the decision. It can be critical to avoiding family conflicts and possible court intervention. Choose wisely, this person may literally be making life and death decisions on your behalf. Some day these decisions may have the power to prolong, or end your suffering and to preserve your estate or spend it all on medical care. Think about this carefully. Tell them if, and when, to "pull the plug". This POA gives them their marching orders.
A Durable Power of Attorney grants another person the legal right to manage your assets on your behalf. Their powers can be limited or unlimited depending upon the terms of the POA. The "Durable Power" allows them to act even if you are incapacitated. This POA terminates upon your death. Choose wisely, this person can buy and sell your assets, so they should be trustworthy, honest, and competent.
A Living Trust is a legal agreement that creates a revocable "Trust" for the management of your financial affairs during your lifetime (in case you become incapacitated), and can manage the assets after your death for your heirs. For more information about Living Trusts see our FAQ page. Making a living trust has numerous advantages. Living trusts are flexible estate planning tools that are easily tailored to the type of living trust best suited to the estate plan, whether a single individual or a married couple. In some cases a special type of trust called an AB Trust, (also known as an exemption trust), can provide significant estate tax shelter for the remainder estate.
These are 5 excellent reasons why your Estate Plan is a matter of Life and Death. I hope this explanation has convinced to prepare your Estate Plan information for your own sake, and for your family and loved ones. These are very personal decisions that cannot be postponed indefinitely. Sooner or later these decisions will be made by someone, and they are best made by you, or your designated Power of Attorney acting on your instructions. Think about that.
The planning effort that goes into the preparation of your integrated Estate Plan information is also very useful and important for planning your retirement. The same assets that will be part of your integrated Estate Plan are also part of your retirement plan.
Live long and prosper!
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