Estate Planning

Time To Travel

DO YOU HAVE AN UP-TO-DATE

ESTATE PLAN?

The fi rst thing to understand is that writing a will and having an estate plan are actually two diff erent processes, even though an estate plan will include a will.

WILLS

Creating a will can be a fairly simple process. It will address who will take care of your children, who will take over your business, and who receives your assets and other personal property. A will requires the naming of an executor responsible for fulfi lling the deceased’s wishes. Having one’s wishes defi ned in a will ensures privacy, helps avoid family disputes and saves money by avoiding probate and the expense of attorneys and public trustees to determine the distribution of assets which then becomes public information.

ESTATE PLANNING

Estate planning is the process of designating who will manage and distribute assets after death or incapacitation. It is a more intensive process and includes a variety of documents including the last will and testament. While it may be overwhelming to contemplate, a well-designed estate plan will ensure that assets are distributed according to one’s wishes. In addition to the last

will and testament, an estate plan might include a living will, a fi nancial power of attorney, a living trust, and benefi ciary designations. An estate plan can be particularly helpful in the case of multiple marriages, business ownership, specifi c charitable donations, or specifi c requests for health or property. It can also ensure wishes are carried out and that assets are distributed as designated.

LIVING WILL

A living will is a document that describes the type of care one would want if incapacitated and cannot speak for themself. This can assist the family with diffi cult decisions and avoid confusion. A fi nancial power of attorney allows for a designated appointee to handle fi nancial aff airs in the event of incapacitation. They can make fi nancial decisions in accordance with the instructions defi ned in the estate plan.

LIVING TRUST

A living trust is a document created during one’s life where a designated person, the trustee, is given responsibility for managing that individual’s assets for the benefi t of the eventual benefi ciary. It is designed to allow for the easy transfer of assets, thereby avoiding probate. A living revocable trust allows someone to be their own trustee and allows for changes in benefi ciary at any time. An irrevocable living trust is restrictive, and benefi ciaries may not be changed but there are certain benefi cial tax consequences.

Beneficiary designations explain who receives which assets such as an IRA, insurance policy, savings account, or other financial instruments.

A well-executed estate plan can minimize gift, estate and generation skipping transfer taxes to ensure that the family receives as much of the deceased’s estate as possible. Everyone’s plan is different and requires the right team of professionals to implement. It is also important to update the plan regularly as personal circumstances, legislation, and tax laws change frequently.