An estate plan is partly intended to assist your beneficiaries and heirs after you die. But thorough planning involves more than that.
Incapacity
An estate plan should cover more than your affairs after your death. For instance, a good plan should address the possibility that, at some point, you may become incapacitated due to illness or injury.
Your estate plan should identify and authorize competent and trusted individuals to make financial, health care and other important decisions for you. Having a power of attorney can help assure that these important decisions are made by someone you trust.
Select decision makers, communicate your wishes to them and execute powers of attorney now. Don’t wait until it is too late.
Funeral and burial plans
Make and include information on your burial plot and funeral plans in your estate documents. Do not burden your family with searching for this information or making these plans.
Your executor should not have to make these decisions. Designate a person who will be in charge of your funeral and burial arrangements and assure that they understand and respect your wishes. Confusion about your directives may place this issue in probate court.
Taxes
Waiting to transfer property until after you die, instead of gifting it during your lifetime, may have financial advantages for your beneficiaries.
Your relatives could face a costly tax bill if they sell any property that you conveyed to them before your death. That property’s basis depends on the date of your purchase and not when you made the gift.
Your family may have to pay a tax bill that could have been avoided if you granted the deed after you died.
Back ups
It’s a horrible thought, but you and your spouse could die in the same accident, fire or other disaster. You should name a secondary beneficiary.
Likewise, it is important to have backups for your executor and other decision makers. They may be unable to fulfill their duties because of death, incapacity, or other circumstances. A court will select substitutes if you do not.
Beneficiary designations
Along with setting forth beneficiaries and their estate share in your will, you need to submit a directive to your financial institution that sets out the interest in your accounts after you die. Otherwise, the institution’s rules will override what is in your will.
Attorneys can assist you with developing a plan that addresses these issues. They can help assure that directives are carried out.
