Basic Estate Planning

No one lives forever on this earth. It is wise to take time to plan where your finances and assets will go upon your death. You don’t want to be caught off guard especially if you have children. Consulting a specialist in the field, an estate lawyer, will assist you in the appropriate distribution of your estate. The first step towards proper estate planning is establishing a will.

Establishing a Will

Regardless of the size of your estate, everyone needs a will. A will protects your financial interests and that of your children. In a will, you declare the distribution of your remaining belongings and assets. You also legally designate a guardian for your children.

If you neglect this process, the government is then put in charge of determining the distribution of your property.   There are online and software programs to help you write a will. However, it it worth hiring a lawyer to draw up a will to ensure your wishes are properly carried out.

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Power of Attorney

In the event you become ill or incompetent, there are three important documents necessary to ensure your wishes for financial management are still adhered too before your death.

  • The Power of Attorney for Financial Issues: Select the person you want to give charge over your financial matters.
  • The Power of Attorney for Heath Care: Select the person you want to give charge over your health care issues.
  • A Living Will: Declare your wishes for long-term health care procedures.

Part of estate planning also includes determining funeral arrangements which can take the weight of decision making off your living heirs and relatives. You may also consider authorizing annual gifting to reduce the size of your taxable estate. Estate tax only applies on the heir’s inherited portion if it exceeds a certain amount set by the government. It is not applicable on the transfer of assets to the surviving spouse.