It may be unpleasant to think about, but planning to secure your family's financial future after you have passed on is necessary. Many people choose to avoid thinking about their will or the transfer of their estate to their loved ones because it makes them uncomfortable. However, in order to ensure that your family is taken care of when you are no longer around, an estate plan should be developed as soon as possible.
A well-written estate plan will contain several elements that will come into play should you pass on or become otherwise unable to make decisions. These elements are listed below, each followed by a brief description.
A complete estate plan will contain a last will and testament, as well as any information about the development of a trust. A last will and testament document will direct the distribution of your assets to your loved ones after your death. You will want to list your beneficiaries and be specific about what they will receive upon your passing in order to avoid any ambiguity or arguments later on. Additionally, a will should declare who will manage your estate once you have passed on.
It is often common practice for trusts to be created when assets are being left to minors. Establishing a trust allows you to leave money or other assets to your child, godchild, or grandchild that will be set aside for them until they reach a predetermined age or date.
Your estate plan should also include information about who you have authorized to represent you or act on your behalf when you are no longer able to. A statement of power of attorney grants an individual (most often an attorney or trusted loved one) the ability to make decisions in your stead. The necessity for naming an agent to represent you would come into play should you become incapacitated due to medical reasons, or when executing your wishes after death.
A robust estate plan will also contain elements that are intended to increase the estate's value over time and decrease the amount of taxes the estate will face should it be passed on. There are various ways to avoid heavy taxation of your estate by the IRS, such as making annual gifts to loved ones rather than a large lump sum, or paying college tuition or insurance premiums for family members. Work with a talented accountant, such as those at Geddes & Company, P.C. to maximize the value of your estate during your lifetime and decrease the amount of taxes it will face, thereby increasing the financial security of your loved ones after you pass on.
It is never too early to begin thinking about your family's future and long-term financial security. If you are unsure about the status of your estate planning, or uncertain about what to do with your estate after your passing, contact the estate planning experts at Geddes & Company, P.C. We have over 25 years of experience, and offer expert accounting and planning services tailored to the needs of your family and estate. Call us today to find out more.