ESTATE PLANNING

Estate planning is needed for those who wish to ensure that their family and loved ones are provided adequately. It’s essential for the disposition of assets post death and to minimize the taxes imposed by the government. Most estate plans are crafted with the help of an attorney experienced in estate law.

Will Writing Trust Power of Attorney (POA)
    Some of the major estates planning tasks include:
  • Creating a Will.
  • Limiting estate taxes by setting up Trust accounts in the name of beneficiaries.
  • Establishing a guardian for living dependents.
  • Naming an executor of the estate to oversee the terms of the will.
  • Creating/updating beneficiaries on plans such as life insurance.
  • Setting up funeral arrangements.
  • Establishing annual gifting to reduce the taxable estate.
  • Setting up durable power of attorney (POA) to direct other assets and investments.

    A good estate plan should include:
  • Instructions for passing your values (religion, education, hard work, etc.) in addition to your valuables.
  • Instructions for your care if you become disabled before you die.
  • Name a guardian and an inheritance manager for minor children.
  • Include life insurance to provide for your family at your death, disability income insurance to replace your income if you cannot work due to illness or injury, and long-term care insurance to help pay for your care in case of an extended illness or injury.
  • Provide for the transfer of your business at your retirement, disability or death.
  • Be an ongoing process, not a one-time event. Your plan should be reviewed and updated as your family and financial situations (and laws) change over your lifetime.

Estate planning is not only for “retired” people, although people do tend to think about it more as they get older.
Unfortunately, we can’t predict how long we will live, and illness and accidents happen to people of all ages.
Estate planning is not only for “wealthy,” , although people who have built some wealth do think more about how to preserve it. Good estate planning often means more to families with modest assets, because they cannot afford to lose it.

An estate plan begins with a will or living trust:
A Will provides your instructions, but it does not avoid probate. Any assets titled in your name or directed by your will must go through your state’s probate process before they can be distributed to your heirs. If you own property in other states, your family will probably face multiple probates, each one according to the laws in that state. The process varies greatly from state to state, but it can become expensive with legal fees, executor fees, and court costs. It can also take anywhere from nine months to two years or longer. With rare exception, probate files are open to the public and excluded heirs are encouraged to come forward and seek a share of your estate. In short, the court system, not your family, controls the process.
For these reasons a revocable living trust is preferred by many families and professionals. It can avoid probate at death, prevent court control of assets at incapacity, bring all of your assets (even those with beneficiary designations) together into one plan, provide maximum privacy, is valid in every state, and can be changed by you at any time. It can also reflect your love and values to your family and future generations. Unlike a will, a trust doesn’t have to die with you. Assets can stay in your trust, managed by the trustee you selected, until your beneficiaries reach the age you want them to inherit. Your trust can continue longer to provide for a loved one with special needs, or to protect the assets from beneficiaries’ creditors, spouses, and irresponsible spending.
A living trust is more expensive initially than a will, but considering it can avoid court interference at incapacity and death, many people consider it to be a bargain.

What is included in estate:

This includes all the assets held in your name alone or jointly with others viz. bank accounts, real estate, stocks, mutual funds, fixed deposits, bonds, furniture, cars and jewelry. Your assets may also include life insurance proceeds, retirement accounts and payments that are due to you such as a tax refund, outstanding loan or inheritance.
The value of your estate is equal to the “fair market value” of your various types of property, post deduction of debts (your car loan, for example, and any mortgage on your home).
The value of your estate is important in determining whether your estate will be subject to estate taxes after your death s and whether your beneficiaries could later be subject to capital gains taxes. Ensuring that there will be sufficient resources to pay such taxes is another important part of the estate planning process.

Decide on Beneficiaries:

After you've considered the people who will help carry out your wishes and settle your estate, the next step is to list your beneficiaries and understand any specific options you have for each of them.
Beneficiary is someone who will inherit assets from you. Another commonly used term is heir, although in legal terms, this refers to the family members who inherit under state law from those who pass away without a will

Consider Insurance:

Life insurance can offer death benefits to help with expenses and it can also be used for wealth transfer. Death benefits can help your survivors deal with final expenses and maintain their standards of living, even for years to come, if you plan for your coverage to do so. Insurance can also be used to ensure that a business or plans such as a college education stay on track.

Reviewing & Updating Your Estate Plan:

Once you have established your estate plan, make sure it stays sound by revisiting it at regular intervals or at key life events. Many people review their estate plan at a regular frequency, often when they review their whole financial plan viz. annually or at least every three to five years or when there is a life event.

    In addition to regular reviews, it’s a good idea to review and update your plan at life events like the following:
  • The birth or adoption of a new child or grandchild.
  • When a child or grandchild becomes an adult.
  • When a child or grandchild needs educational funding.
  • Death or change in circumstances of the guardian named in your will for minor children.
  • Changes in your number of dependents, such as the addition of caring for an adult.
  • Change in your or your spouse’s financial or other goals.
  • Marriage or divorce.
  • Illness or disability of your spouse.
  • Change in your life or long-term care insurance coverage.
  • Purchasing a home or other large asset.
  • Borrowing a large amount of money or taking on liability for any other reason.
  • Large increases or decreases in the value of assets, such as investments.
  • If you or your spouse receives a large inheritance or gift.
  • If any family member passes away, becomes ill, or becomes disabled.
  • Changes in state laws covering taxes and investments.
  • Death or change in circumstance of your executor or trustee.
  • Career changes, such as a new job, promotion, or if you start or close a business.

Reviewing your plan at regular intervals in addition to major life events would ensure that your legacy is passed accordance to your wishes and that your beneficiaries receive their benefits as smoothly.

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