Everyone can benefit from proper estate planning

|tab|

Many people think estate planning is only for the wealthy. The truth is almost everyone regardless of assets needs an estate plan. |ret||ret||tab|

That's because an estate plan addresses more than just reducing the taxes heirs must pay on assets received from an estate.|ret||ret||tab|

For example, without an estate plan, your assets would be distributed according to the rules of your state via probate court, which could mean a lifetime of accumulated wealth may not go to the individuals as you intended. The probate process also can be lengthy and ex-pensive, and it can open personal financial matters to the public.|ret||ret||tab|

An estate plan not only governs distribution of assets upon your death, it also can involve how you are cared for if unable to handle your own affairs while still alive.|ret||ret||tab|

Here are some important components of an estate plan that you should consider putting into effect today:|ret||ret||tab|

|ret||ret||tab|

Step 1: Make a will |ret||ret||tab|

Meeting with your attorney and developing a will is an important step in the estate-planning process. In your will, you can direct how you want assets distributed among family members, a charity or other heirs upon death. The will should be updated frequently in order to reflect any material or personal changes in your life.|ret||ret||tab|

|ret||ret||tab|

Step 2: A revocable living trust|ret||ret||tab|

A revocable living trust is a trust funded by your assets, which are distributed to your beneficiaries as stated in the trust. A revocable living trust allows for this distribution without the expense, delay and publicity of probate court. Also, a revocable living trust allows assigning one or more trustees to make decisions for you in case of incapacitation. With a regular will, your wishes only will be carried out in case of death; it does not cover incapacity.|ret||ret||tab|

If you choose a revocable living trust, it is essential to also draft a pour-over will. This abbreviated type of will distributes assets accumulated that are not named in the trust and will be transferred to the trust upon death. Individuals with assets of $200,000 or more should consider whether a revocable trust would make sense.|ret||ret||tab|

|ret||ret||tab|

Step 3: A durable power of|ret||ret||tab|

attorney|ret||ret||tab|

Regardless of whether you create a simple will or a revocable living trust and pour-over will, it is important to have a durable power of attorney. When you assign a durable power of attorney to a person, he or she can sign on your behalf and handle your financial matters on your behalf even in the event of your incapacity. However, it becomes void after death.|ret||ret||tab|

Another important document to keep in mind is a health care power of attorney. This document states your medical wishes. It also is vital to frequently update the beneficiary information on a 401(k), IRAs, savings bonds, life insurance and any other accounts you may have.|ret||ret||tab|

Developing a basic estate plan can help ease the stress on family members during a difficult time. An attorney and an investment professional can help you take the steps necessary today to ensure your wishes are carried out to give loved ones peace of mind in the future.|ret||ret||tab|

(The preceding article was provided by Timothy M. Reese, vice president of investments with A.G. Edwards & Sons, member SIPC.) [[In-content Ad]]