Your Will and Estate Planning
- Prepare a will for yourself! An estimated 70% of Americans die without a will. That means a judge will distribute their estate and choose who will care for any minor children. Chances are the judge will not know you told your best friend they could have your coin collection.
- Take inventory of your assets. Your assets do not only include tangible items, but also your investments, insurance policies, and business interests.
- Be as clear and precise as you can when writing your will. You do not want there to be any ambiguities after you are gone.
- Know the federal estate tax exemption threshold. This is the amount you can leave to beneficiaries that is free of federal tax. In 2013, estates under $5,250,000 are exempt from the tax. Once the estate is above that threshold, beneficiaries are taxed up to 40%. Your accountant will know all the details behind this.
- Have at least two witnesses sign your will.
- Should you assign a power of attorney? Why not! There are two important types of powers of attorney in estate planning:
- Springing Power of Attorney – this only comes into effect under the certain circumstances that you precisely lay out in your will. The most common circumstance is in the event that you become incapacitated.
- Durable Power of Attorney – this is effective immediately and your assigned agent will not need to prove you are incapacitated to sign your name.
When in doubt, hire an attorney. They will make sure you fill out the correct forms and everything is taken care of before you are gone. Make sure at least a few people know where your will is filed: is it with the attorney; is it in a secure place; is it in your safe deposit box; who has access?
Your Parent’s Will (and other family members)
- Ask where they keep their wills. This is important because if the will cannot be located. Even though you are positive one exists a judge will distribute the estate.
- If you inherit money from a deceased relative and you don’t claim it, the state does. Each state has a website to help you find an inheritance in which you may be entitled. You can go to http://www.unclaimed.org/ to find your state’s site.
“Given that laws may vary significantly between jurisdictions, the legal advice given on this site should not be considered all-encompassing and applicable to all readers. Please consult an attorney in your own jurisdiction if you need legal advice. This blog is for informational purposes only. We are not attorneys or accountants and strongly suggest you contact a lawyer or accountant prior to taking any action related to the information provided herein.”