Many individuals believe estate planning is only for the very wealthy and is put in place to primarily save on estate taxes.
An estate plan can be so much more. A good estate plan is your family’s roadmap if you aren’t able to deliver it in person. You can even include a personal letter in your estate plan. Perhaps it is about your family, how they earned their money or how they hope to be remembered.
An estate plan should be customized to your goals and objectives.
Here are some questions you should ask to determine whether an estate plan is right for you: Do you want to determine who will inherit your assets and when? How much will your heirs receive? At what age do you want your heirs to receive the funds? Do you want your heirs to receive it all at once? Who will take care of you if you become incompetent? Who will take care of your finances? Who will take care of your minor children?
You may elect to leave your assets in trust for some heirs, yet distribute assets outright for others. A trust can provide for the care of a loved one without overwhelming them with a large sum of money. A trust should be very personal, and great care should be taken to address each beneficiary’s specific situation. An added benefit to leaving your heirs money in a trust is that it can be protected from creditors, bad marriages and outside pressures. In addition, you can address beneficiaries’ problematic issues such as drug or alcohol abuse and financial irresponsibility.
In some situations, you may want to establish a charitable fund to benefit certain types of organizations or a specific charity. Perhaps you want to establish a scholarship fund at your high school or leave a percentage to your favorite charity. This, too, can be accomplished in your estate plan.
A good plan will even have a list of your personal property and who should receive that property. A great deal of heartache and resentment can be avoided by preparing this list and leaving it with the person you have named as trustee of your estate. The plan can certainly provide for the disposition of money, but that is usually the easy part.
The plan addresses what will happen with your family, home and other property you may own. Many people even incorporate special provisions to ensure their pets are well cared for should something happen to them.
What if you can no longer care for yourself or if you live alone? Do you want to stay at home and have a helper come in or do you prefer assisted living? Make sure your desires are followed by putting this in writing.
If you become incompetent, who will make decisions on your behalf? As part of this process, you also will create a living will and health care directive. This is very important, and everyone should have these in place.
While some of these topics are not always fun to think about, it is critically important you make the decisions rather than leaving it up in the air. An estate plan allows you to decide who will handle your affairs and how they will be handled.
Of course, estate planning can avoid probate and save estate taxes, but it is so much more personal. A well-drafted estate plan might keep family harmony and protect your loved ones, and it is a great gift of peace of mind to your heirs.
Jami Peebles is executive vice president and southern regional manager of Central Trust & Investment Co. Based in Springfield, Peebles also is a certified trust and financial adviser. She can be reached at Jami_Peebles@centrustco.com.
