The Importance of Estate Planning

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Filed under: Market Comentary

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One decision that most homeowners would rather not think about deals with estate planning. But we all must realize how important it is to protect, preserve, and manage your estate if you become incapacitated or pass away.

When is the right time to start planning? The answer should be as early as possible because if there isn’t an estate plan in place, attorneys or state officials will possibly make the important decisions for you.

Many homeowners stall on their estate planning because they believe it is a complicated, time-consuming, and costly process. However, according to Rande Spiegelman from the Schwab Center for Financial Planning, estate planning can be as simple as updating the beneficiaries of your insurance policies and retirement accounts.

Spiegelman explains that an estate plan will allow you to accomplish the following important objectives:

1. It will confirm that your assets will go to the people of ‘your’ choice, not who the state chooses
2. It will specify who exactly will care for your minor children if you have any
3. It will not allow family conflicts over your assets
4. It will minimize estate taxes and other transfer taxes
5. It will avoid the costs, publicity, and delays of probate

In addition, Spiegelman suggests doing the following:

Take an inventory of your assets and liablities

You should make a list of the value of your home and any other real estate, cars, jewelry, artwork, and any other physical assets. It is also important to collect bank statements and brokerage accounts, and make a list of all of your insurance policies, their cash values and death benefits. You should also have a list of all liabilities, such as mortgages, lines of credit, and any other debt you have.

Define your estate planning goals

This will include who you want your assets distributed to and in what proportions. It will also include who should take care of any minor children and what you want left for your children’s care and education. You will also want to provide information on who will make any health care decisions on your behalf and who should manage your affairs if you become incapacitated.

Have an estate planning attorney draft up your documents

You will need to meet with an experienced attorney to prepare your estate plan. He or she will then be able to review all of your plans and help you accomplish your goals.

Follow through on your estate plan

Remember that if you have set up a trust, you need to fund it promptly because if you fail to do this, the agreement will not take effect and your assets may not go to the right people.

Estate planning is vitally important for every homeowner so that you can protect your home if anything would possibly go wrong, leaving you incapacitated or even at the time of your death.

If you have any questions about this or anything else that deals with the housing industry, please give me a call.  Or, contact my referral partner, estate planning attorney Dale Bethel.   http://www.bethellaw.net

source: http://www.schwab.com/public/schwab/resource_center/expert_insight/personal_finance/estate_planning/leave_less_to_the_irs.html

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