What Every Taxpayer Should Know About Estate Planning
Estate Planning
Estate planning involves planning how your property will be distributed or used after your death.
Estate planning will give you peace of mind because your family will be provided for and your wishes fulfilled after your death.
List
The first step in estate planning is to make a complete list of all your assets.
You should make a separate list of how your assets should be used after your death.
You should also make a list of beneficiaries for your assets.
Will
The next step in estate planning is to consult an attorney and make a will.
The will is a document that records your wishes as to how your property is to be used after your death.
Children
If your children are young, you will need to name a guardian for your children if they lose both their parents.
You should give the guardian the duty of managing any property or money that your children inherit until they become majors.
Healthcare
You should make provision to pay for your healthcare expenses in the event you are not capable of taking care of your health.
You should name a power of attorney to manage finances and make decisions to give you the best possible healthcare when required.
Funeral and other post-death arrangements
You can open an account to put money to pay for your funeral.
Many banks offer a payable on death account for this purpose.
You can also add specific wishes like the wish to donate any organ in your will.
Tax
An important aspect to consider when planning your estate is the payment of estate tax.
If you consult an experienced estate planning attorney, you will get a clear picture of the amount of tax you need to pay while planning your estate.
Beneficiaries
If you name beneficiaries on your bank accounts or other plans like retirement plans, you will make it easy for them to gain access to the funds before your will is probated.
If your children are young, you can consider taking a life insurance policy naming them as your beneficiaries.
Power of Attorney
One important step in estate planning is to choose a power of attorney.
The power of attorney should be a person you can trust. In the event you are rendered incapable of handling your finances or properties, the power of attorney should be given the authority to manage your affairs.
Storage
You should store your will and other estate-related documents correctly.
Your lawyer and power of attorney should be aware of the place where the documents are stored.
Once you plan your estate correctly, you can be assured that your beneficiaries can get the benefit of your assets in a hassle-free manner after your death.
Category: Financial Planning
