Estate planning

Take control of your future, today

Estate planning may seem like a topic for your parents and grandparents. But taking care of this planning activity now allows you to control what happens to your current assets and assets you acquire in the future. Your estate plan documents should be reviewed every three to five years or whenever there is a significant change in your family or financial situation, or when tax laws change.

Here are some things to consider:

  • What is your intent for your wealth?
  • Who would you like to receive your assets at your death?
  • Who should be in charge of settling your financial affairs? This role requires time as well as expertise in legal and tax matters.
  • Who should take care of your minor children if you cannot?
  • If you become incapacitated, who should make financial, medical and legal decisions for you?
  • If you are a business owner, who will handle the business if you become incapacitated or die prematurely?

Start with your will

Your will is a legal document that outlines your wishes for your assets. Your attorney can help you create a will that communicates your wishes.

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What happens if a person dies without a will?

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You’re right.

Without a will, assets are distributed according to the laws of the state where you have legal residence. Each state differs as to how spouses, children or other family members benefit by default if you don't have a will. Your assets could go into a process called "probate," which may be costly and could take months or even years to resolve.

Good try, but not quite.

Without a will, assets are distributed according to the laws of the state where you have legal residence. Each state differs as to how spouses, children or other family members benefit by default if you don't have a will. Your assets could go into a process called "probate," which may be costly and could take months or even years to resolve.

 

The people involved

Use your will to determine who will play these important roles:

  • Beneficiaries receive your assets
  • Guardians raise your minor children
  • Executors handle all of the day-to-day administration of settling your estate
  • Charities receive your philanthropic donations
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Other important documents

Your will is not the only document that can control transfer of your assets.

  • Titled Assets: If you own property as joint tenants with rights of survivorship, those assets will automatically go to the other owner on the title.
  • Prenuptial Agreement: This document may describe what the surviving spouse may receive at your death. This should be coordinated with your estate plan to avoid conflict.
  • Beneficiary Designations: Your life insurance proceeds and retirement plans transfer based upon your beneficiary designations, not your will or any other documents. Keep these current as your job or family situation changes.
  • Trust Document: Legal document that controls the disposition of the assets held in the trust, not your will or other documents.

What if you become incapacitated?

No one likes to think about a debilitating accident, injury or illness. But it’s important to be prepared. As you discuss your intentions for your estate, there are several additional documents that your attorney can prepare for you.

  • Durable Powers of Attorney authorize your designated agent to handle your financial matters
  • Health Care Powers of Attorney designate someone to make medical decisions for you
  • Directives to Physicians (living wills) express your wishes concerning end-of-life decisions
  • Designations of Guardian explain who should be your physical guardian if needed

 

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Tax Strategies

As you accumulate wealth, you should begin to think about ways to minimize estate taxes. Currently, you can transfer up to $11.7 million to anyone at your death without triggering a federal estate tax of 40%. This is considered your lifetime exemption. However, you can also give up to $15,000 per year to as many people as you wish without it counting toward that lifetime exemption. Note that state laws may have exemptions of different amounts.

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You need a will or a living trust —there's no reason to have both.

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You’re right.

A will is only effective after your death; a living trust can be put into action during your life. The primary benefit of a living trust may be that it can be used by your named trustee to handle your financial matters if you become disabled. If you use a living trust, it becomes the primary document for the disposition of your estate, but you'll still need a will. Its primary purpose will be to transfer any assets not already in your living trust to the trust at your death for disposition.

Actually, it’s false.

A will is only effective after your death; a living trust can be put into action during your life. The primary benefit of a living trust may be that it can be used by your named trustee to handle your financial matters if you become disabled. If you use a living trust, it becomes the primary document for the disposition of your estate, but you'll still need a will. Its primary purpose will be to transfer any assets not already in your living trust to the trust at your death for disposition.