Estate planning is an ongoing process and should be started as soon as one has any measurable asset base. As life progresses and goals shift, the estate plan should move to be in line with new goals. Lack of adequate estate planning can cause undue financial burdens to loved ones (estate taxes can run higher than 40%), so at the very least a will should be set up even if the taxable estate is not large
While many of us like to think that we’re immortal, the old joke is that only two things in life are for sure: death and taxes. Not only is it important that you have a plan in place in the unlikely event of your death, but you must also implement your plan and make sure others know about it and understand your wishes – as Benjamin Franklin’s famous quote goes, “by failing to prepare, you are preparing to fail”.
Easy guide for an Estate Plan -Here is a list of items every estate plan should include:
- Durable power of attorney
- Beneficiary designations
- Letter of intent
- Healthcare power of attorney
- Guardianship designations
Wills and Trusts -A will or trust should be one of the main aspects of every estate plan, even if you don’t have substantial assets. Wills help to ensure that property is passed according to an individual’s wishes (if drafted according to state laws). In addition, some trusts help limit estate taxes or legal challenges. However, simply having a will and/or a trust isn’t enough. The wording of the document is critically important. A will or trust should be written in a manner that is consistent with the way you’ve bequeathed the assets that pass outside of the will. For example, if you’ve already named your sister as a beneficiary on a retirement account or insurance policy (assets that typically pass outside of a will to a named beneficiary), you don’t want to bequeath the same asset to a second cousin in the will. It could lead to a will contest. Not to mention that both individuals could be bitter toward each other (and you) for involving them in a legal battle. (For further insight, see our affiliate Wills Factory- Why You Should Draft A Will. ) – See more at: www.willsfactory.co.za
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