For many executives, estate planning is an uncomfortable subject. That’s understandable, but there are adverse consequences to avoiding it.
It certainly is understandable that no one enjoys a conversation about death – especially their own! And, with the estate tax exemption now set at $5 million for an individual and $10 million for a couple, many people may believe they have no reason to consult an attorney about their estate planning. But avoiding the topic of estate planning can mean unnecessary expense, confusion and conflict.
SmartBusiness last week highlighted the fundamentals of a “well-thought-out estate plan,” with topics that everyone should consider – whether prince or pauper.
- Why do you need an estate plan? A comprehensive estate plan ensures that your estate id distributed according to your wishes, provides protection for your in the event of your own disability, and allows you to plan for minor children, pets, and charitable causes.
- Can I write my own will? You certainly can, and there are many online sites to help you do so! However, as in most things of life, you do get what you pay for. Improperly drafted or last-minute, hand-written wills frequently are contested and invalidated in court. If you don’t know what you’re doing, the outcome could be much different than you expect.
- What should every estate plan have? SmartBusiness recommends two powers of attorney and a living will. I agree, but would expand the list to include a will, powers of attorney for financial affairs and for health care, and a living will.
- What about trusts? Many people choose to create trusts, not only to reduce estate taxes, but also to help their heirs avoid probate. Trusts also can help shield assets from loss to due to unforeseen circumstances, such as the bankruptcy, divorce or lawsuits of your heirs.
- What mistakes to people tend to make in estate planning? The writer points out two common mistakes: failure to plan for their personal effects, and failure to review and update their plans over time.
Tags: estate planning, estate tax, powers of attorney, trusts, wills