February 2012 Hints & Tips

To access the past hints please click on the link, Archives Tips

Plan for the Future & Take charge of your life

Following on January's hints about taking charge of your life, I have included a bit more on the topic of making a will, probate and steps to get ready for the future.

When someone dies, there is a great deal of sadness and people struggle to cope. If your affairs are in order, it will be a great deal less stressful on the family left behind. It is never too early to consult an attorney to discuss this subject. You can also check for information online and download forms that are available in the area that you live.

In the USA, almost two-thirds of Americans do not have a will. It is up to the judge and the laws of that state to determine the distribution of their assets and belongings should they pass away unexpectedly. If you do not make these important decisions, basically, you are leaving someone else to make the decisions for you. These may not be in the best interests of your family and may fail to meet their future needs. A thoughtful estate plan takes your priorities into account, protects your heirs, and establishes your legacy.

Your Estate

To begin making a plan or updating a plan you already have, you will need to know the current value of all your assets. For many of us, our home, is the largest investment we make. You or a real estate agent can make a comparative market analysis, (CMA) using properties that have already been listed and sold in your area. This gives you a fairly good idea of the worth of your property.

The Problem with Probate

Probate is the means by which state courts validate a will and clear the executor to pay debts, and taxes, sell property, distribute funds, and perform tasks necessary to settle an estate. It can be a lengthy and expensive process especially when there are disputes, which add to the legal fees. A probate can take up to 3%-7% if the value of the estate.

Document Your Decisions

Last Will and Testament

This document provides for the care of minor children by establishing guardianship and stipulates how you want your remaining assets to be divided amongst your heirs. An executor is named to oversee the distribution of assets and pay any taxes, debts or other obligations that are due.

A Trust

This is a separate legal entity that is structured to hold assets which you can transfer to it. Trusts help prevent financial uncertainty, delays, & family discord after death by directing the prompt distribution of the estate. Unlike a will, the contents of a trust typically avoid probate and are also kept private. They can also be held to reduce taxes.

A Power of Attorney
A Power of Attorney will allow someone you designate to handle important financial transactions on your behalf should you ever become incapacitated. This can include powers such as signing checks for household expenses to arranging the sale of property or other personal or business assets.

Advanced Health Care Directive
This is also called a Living Will, as it includes your preferences for life-sustaining procedures. You can also appoint someone to make decisions for you should you ever be in a state, like a coma, where you are unable to instruct your doctor that you may not want to be hooked onto machines to extend your life. Read more about this on January 2012, Hints & Tips

A quick Summary of steps to take

  • Review and determine the current value of your assets, including your home, jewelry or other valuable items
  • Review insurance coverage and consider if it is adequate to cover your personal financial situation, debts and other obligations
  • Decide who you will appoint as your children's caregivers, that is, physical guardian and financial guardian. They can be 2 separate persons
  • Decide how you want to distribute your assets and who your beneficiaries are
  • What potential healthcare decisions you may face and if you are unable to make them, who should make them on your behalf
  • Collect all relevant documents such as financial statements, real estate deeds and insurance policies and make an appointment with an attorney who specializes in estate plans
  • Once finalized, keep a copy of all legal documents and related information in a fire-proof safe, (if you have one), and/or in a safe deposit box
  • Appoint your executor or an adult child to have access to your safe deposit and have them keep a key to your safe deposit box, or have them know where your key is located. The bank where you keep your jewelry will let you know that rules that apply, should you pass away or are unable to get to the bank yourself.
  • Give your appointed executor a copy of the documents and a specific letter of last instructions for safekeeping.

Hopefully you will enjoy a sense of well-being knowing you have taken care of the future of your assets and how they should be distributed

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