|
             
|
Legal
Estate Planning Can Save You Time and Trouble
By Attorney David R. Feakes, Feakes Associates
Want a good return on an investment? Put a little time into planning your estate, and you and your family will receive big benefits.
Your estate consists of all your property, including:
-
your home and other real estate,
-
tangible personal property, such as cars and furniture, and
-
intangible property like insurance, bank accounts, stocks and bonds, and pension and social security benefits.
Through your estate plan, you can decide how to protect and provide for your family in the event of your death or incapacity. You can also plan how you’ll provide for your kids’ or grandkids’ education, or determine how to help a favorite cause, such as a charity, hospital, or college.
Who Needs an Estate Plan?
Everyone needs an estate plan. One glance at the news demonstrates that far too many young and middle age people die suddenly, often leaving behind minor children who need care and direction. And estate planning can be part of your overall financial plan, where you set goals for your children's college tuition and your retirement needs. If your finances or family circumstances change later in life, it's usually easy and inexpensive to adjust your plan.
Most people also plan for mental or physical incapacity resulting from an accident or illness. Through living wills, health-care advance directives, and other mechanisms, they control beforehand how they are to be cared for if disaster strikes. Through a living trust, they can control how their property is to be managed and their family supported in the same circumstances.
If You Don’t Plan…
If you die intestate (without a will), and you don’t transfer your property by some other means - such as a trust, joint ownership, or beneficiary designation (for insurance, IRAs, and the like) - state law will step in and decide how to distribute it. The only way to assure that your property will go where you want it to, and that your other goals will be achieved, is to plan your estate. Only estate planning gives you the feeling of control that comes from knowing your family is provided for as you wish.
How the Planning Process Works
Begin by taking a quick inventory of your assets and liabilities. Total up:
-
your income, including dividends and interest;
-
the amounts and sources of retirement benefits, including IRAs, pensions, Keogh accounts, government benefits, and profit sharing plans;
-
your financial assets, such as bank accounts, brokerage accounts, certificates of deposit, T-bills, and outstanding loans;
-
real property, including your home and other real estate; and
-
life insurance policies.
Don’t forget to consider your debts as well, including mortgages, installment loans, business debts, and the like. Then think about how you want that property to be used. Think too about what you’d want to happen in the event you are incapacitated - how would you want yourself, your property, and your loved ones cared for?
Once you have completed your inventory of assets and liabilities, you need to think about the people you want to carry out your wishes. Depending on the complexity of your estate planning and the scope of your estate documents, you may need to identify people to take the following roles:
Executor: An executor is the person named in your will to carry out your will’s instructions and requests. The executor is usually supervised by the Probate Court. Among other things, your executor will take care of your estate, pay your debts and estate taxes, and distribute your money and property by following the instructions in your will.
Guardian: A guardian is the person(s) you choose to care for your children. Guardians are given custody of your children and their property and will provide for your children’s care, welfare, education, and support.
Trustee: If you create a trust, the trustee is the person who receives your property and places it in your established trust. The trustee manages the trust property for the benefit of your named beneficiaries according to the terms of your trust declaration.
Health Care Agent: The health care agent is the person you appoint in your Health Care Proxy to make health care decisions for you if you are not able to do so.
Attorney-in-Fact: The person you appoint in your Power of Attorney to legally act on your behalf is your attorney-in-fact.
You should review your estate plan periodically, so you'll want to stay in touch with your lawyer. Don't think of estate planning as a one-time retail transaction, but an occasional process that works best when you have a continuing relationship with your professional advisors.
Communication is the Key
In planning your estate, it’s highly desirable that you and your family agree on what you’re trying to accomplish. If you’re married, you and your spouse should track down all your assets -- what benefits each of you is entitled to, and where the money is invested. It's especially important to find out how property each of you owns is titled, including insurance and other beneficiary designations. Of course, a couple should communicate with each other so they agree on what goes to the surviving spouse and what goes to the children.
And don't forget to tell the persons you’ve selected as executors or guardians of the children, to make sure they agree to serve. It’s a good idea to name alternative executors or guardians in case your first choice can’t serve when the time comes.
Attorney David R. Feakes is the owner of Feakes Associates, 311 Great Road, Littleton, MA (978- 742-9700; david@feakeslaw.com)
Reprinted from The Beacon (Acton, Massachusetts), June 10, 2004
