Estate Planning: A Final Gift to Your Family

K. Allan Voss

One of the most important gifts you can make to your family is a well thought out plan for your estate, no matter how small or large it may be. An estate plan allows you to make sure that your estate passes to the beneficiaries you want, in the way that you want and when you want. It can also reduce taxes, court costs and attorneys fees and give you the comfort of knowing that your loved ones will not be burdened by sorting out your estate.

Cover the Basics

Every estate plan should include at least these three basic documents:

• Durable power of attorney for finances and property
• Power of attorney for health care (or medical directive)
• Will

The durable power of attorney allows someone you trust to manage your property during your lifetime if you are unable to do so or as a matter of convenience.  In many cases, this is the most important planning document that you can have. The power of attorney for health care allows the person you chose to make important medical and health care decisions for you if you cannot do so. It ensures that your loved ones will be involved with making those important decisions for you, and it gives you peace of mind from knowing that your wishes will be carried out by those closest to you. Finally, the will directs how your property is to be managed and distributed after your death and who will be responsible for administering your estate.  

Tailor the Plan to Your Needs

In addition to these three basic documents, many people use a revocable or "living" trust to manage their estates both during their lives and after they are gone. A properly set up living trust can avoid probate and maintain privacy with regard to your estate and your beneficiaries. Your advisors can tell you whether a trust makes sense in your situation.

It is also important to make sure that assets such as life insurance, annuities, IRAs and retirement plans are distributed properly. Do not make the mistake of assuming that these assets will be controlled by your will or trust. If you have any of these assets, you need to have carefully prepared beneficiary designations for them on file with the companies that manage them.

Remember Those Important to You

A primary benefit of a good plan is that you decide who benefits from your estate. That may include relatives, friends and charities. Including charities in your plan not only ensures that they will benefit from your estate but it allows you to make your gift to them in a way that saves taxes and benefits the other beneficiaries of your estate.  
In many cases, the simplest and best way to make a gift to charity is to designate the charity as a beneficiary of part or all of an IRA or retirement account. You can also designate the charity as a beneficiary in your will or trust or make lifetime gifts. There are other options that might work best in your situation, so it is important to get advice from an experienced estate planner on the best way to make such gifts.

Get It Done

It is never too early to plan your estate. Planning does not need to be difficult or expensive. Experienced and qualified advisors can help you put into place a plan in an efficient and cost effective way. The important first step is to make the commitment to do it and then contact a qualified advisor to help you make this important final gift to your family.

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