Plan for the Future
While it can be a difficult thing to think about, planning what happens after you pass away is vitally important, no matter your age, health, or position in life. Planning your estate allows you to ensure that in the event of your passing, your family will be taken care of and your wishes will be carried out. An estate plan gives you peace of mind and will save your family and loved ones from unnecessary stress in the future.
Wills & Trusts
Planning how your property will be distributed after your passing can be a stressful process but is necessary to ensure your loved ones are taken care of when you are gone. You must decide who you want to inherit your assets and name an executor who will have the responsibility of making sure your estate is distributed according to your wishes. In a will, you will also decide a guardian for your children if you and your spouse both pass.
A trust is another option, similar to a will, for distributing your property. The main advantage of holding your assets in a living trust is that property left through the trust doesn’t have to go through probate, a time-consuming and costly process in which a court determines the validity of a will.
Regardless of what you decide to do, it’s always the right time to begin planning for your passing. The sooner, the better!
Powers of Attorney
By creating a durable power of attorney (DPA), you are giving a person you trust the authority and responsibility to handle decisions for you if you ever become incapacitated or unable to handle your own affairs. Your agent will make decisions regarding your finances, health-care, and more. There are four main types of powers of attorney; limited, general, durable, and springing.
Advance Healthcare Directive
It is important to declare and write out your wishes for health care and medical treatment in case there’s ever a time in which you may be unable to make medical decisions for yourself. By signing a “living will” and declaring a health care power of attorney, you will maintain control over the types of medical attention and health care you will receive at all times. A living will states your intentions of what medical care/procedures you do and don’t want. A power of attorney for health care will make sure that your wishes for your medical treatment will be adhered to if you are too sick to speak for yourself. In some states, these documents are combined into one, called an advance health care directive.
The fact of the matter is that most people will never have to pay estate taxes. Currently, the estate tax exemption is $11.4 million per individual. That means than an individual can leave $11.4 million to their heirs and pay no federal estate tax while married couples will be able to leave $22.8 million. In order for a spouse to use their late husband or wife’s unused exemption, they must elect it on the estate tax return of the first spouse to die, even when no tax is due. It is important to note that the $11.4 million estate tax exemption is the federal exemption rate. Some states have lower exemptions, and some states don’t have an estate tax at all. Although there’s a decent chance that you will not need to worry about estate taxes, it is a good thing to know regardless.
Organizing Your Files and Papers
The last step of planning your estate, and the easiest if you have been doing it all along, is to organize your estate-planning paperwork and financial records. Store them in a safe place such as a safe, so that your executor (the person you choose to distribute your property after your passing) can access the documents they need to carry out your wishes.
Remember to consistently revisit your estate plan to revise it as needed. As life changes, so should your plan after you’re gone.
It is never too early or too late to begin planning your estate. Call Casale & Bonner P.C. at 570-326-7044 to speak with a lawyer and begin planning for the future.