Principle 8: Estate Planning
We all know that at one point we are going to die. When this happens we may leave behind real and personal property. Real property is real estate and personal property is our other possessions: cars, jewelry, bank accounts, etc. The purpose of estate planning is, while still alive, to plan on how you want to distribute your real and personal property after you are gone. It should be set up to eliminate extra administrative costs, reduce taxes and quarreling over your property during their time of mourning.
Related Posts
Enjoy Living with a Good Estate Plan
I remember growing up my grandmother having a trust and that it protected her assets (possessions). I had no idea what that meant or how it worked. The more I learned the more I knew that I had to make sure that my family was protected. We completed our first estate plan in 2010 and it was a great learning experience. We used an attorney that specialized in estate planning and I would like to share with you the ten parts to our estate plan.
- Certificate of Living Trust and Living Trust. This certificate of living trust lays out who the trustees, or who can alter the trust. The living trust contains the entire living trust. Here are some of the items listed in it: successor trustees (who will manage the trust if me and my spouse pass on), who the beneficiaries are (who will get all of the assets), who will get the assets if the beneficiaries are not alive, how will the assets be distributed (to whom, at what dates and what amounts), additional information on disbursements and other information.
- Assets of the Trust. Most people will take the time to set up a trust, but the assets have to be placed in the trust. This is documentation of what items are in the trust. Some of these assets might be in your own name or both of your names. If they aren’t in the trust, then they are not covered by the trust.
- Amendments to the Trust. Things change over time and this is the part that you are able to add those additions or deletions. You don’t want to do a new trust each time because you could end up with multiple wills and directives and somebody might have the old one. Just make changes and keep them with the original.
- Transfer Instructions. These are instructions for funding the trust. In part 2 we have the list of assets. This contains instructions on how to get the assets in your trust. This can include your deed to your home, 401(k), checking and savings, automobiles, etc.
- Last Will and Testament – Me. This contains a simple will that names my beneficiaries, who will be my personal representative (who will execute my will) and the guardians for my children. This will cover anything that was not included in the trust.
- Last Will and Testament – Wife. This contains the same information as my last will and testament.
- Personal Property Gift List. This is a chance for you to give certain items to your beneficiaries. For instance, we have a piano, but you can’t cut it into 3 pieces. You need to decide which items, such as jewelry, pianos, etc., go to which beneficiary. This will prevent fighting over items after the death of a loved one. That is the last thing you want as you move on.
- Durable Power of Attorney for Health Care and Medical Decisions. You need to make sure that you cover all issues that might happen with your health or medical conditions. You need to determine who will carry out these decisions for you and what authority you want to give them. You also need to choose what you want to happen. Some people want to participate in medical research, donate their organs, or nominating a guardian. This needs to be done for both you and your spouse separately. You might have different preferences.
- Durable Power of Attorney for Financial Matters. This is like the durable power of attorney for health care and medical decisions, but it pertains to your financial matters. Once again, you need to have separate ones for you and your spouse.
- Important Contact Information and Special Instructions and Directives to the Trustee. The contact information seems simple enough, but what are special instructions. The one that we have is our funeral plans. The last thing I want my spouse or trustee to worry about is my funeral plans. This is a great place to give instructions.
This may seem like a lot, but I don’t have to worry about dying. I only have to worry about living a good life. I would rather spend my time on this great planet enjoying life. Isn’t that the reason why we are here?
Powers of Attorney
I spent the last weekend watching my mother lie in a hospital bed. She has traditionally handled the finances in her house. These two items posed a problem as I tried to help my father figure out what was going on with the finances. There are many other families that face this same or similar type of problems when a loved one becomes incapacitated. This brings us to my article for the day about po...
Estate Planning Introduction
We all know that at one point we are going to die. When this happens we may leave behind real and personal property. Real property is real estate and personal property is our other possessions: cars, jewelry, bank accounts, etc. The purpose of estate planning is, while still alive, to plan on how you want to distribute your real and personal property after you are gone. It should be set up to el...
