You worked hard to provide for your family and now it is time to decide who will inherit your home and possessions. So how do you ensure your wishes will be carried out when you are gone? Follow the tips below to create an iron-clad estate plan:
- Start by making a complete list of all of your assets, including investments, retirement savings, insurance policies, and real estate or business interests. An ironclad estate plan will cover each of these points so nothing is left to chance.
- Think about how you want your assets and property divided up, who the best people to inherit them would be, and in what proportion. If you do not name someone to receive an item, your assets will be distributed by the court. Consider the following questions: Will your spouse or other heirs be capable of managing the assets he or she inherits from you, or should they be placed into a trust? Who will be the Executor of the estate? Do you want to make any assets available for non-family members or charities?
- Make a point to discuss inheritances and decisions with your family and heirs to avoid complications later. Simple misunderstandings can often lead to costly probate matters and will contests.
- Stay informed of current federal estate taxes, gift taxes, and estate tax exemptions. The Tax Relief Act of 2001 phased in several changes that could affect you.
Read about the Tax Relief Act now
- Besides planning for your estate and property, you need to plan for yourself. Consider long-term care planning: Will you be able to pay for long-term care with private funds, or is a long-term care insurance policy best? Could you qualify for Medicaid to cover these costs?
- Be sure to name both a guardian and financial trustee for any minor children in your will if both you and your spouse were to pass on. In most cases, they should not be the same person.
- If you become incapacitated without naming a person to handle your financial decisions, the court will decide on a guardian for you, which may end up costing your family. It is best to create a power-of-attorney to protect your interests.
- Living wills are important but are not always followed. A health care proxy will enable you to protect your interests if your living will cannot be found, if family members try to fight a decision in court, or if the complete circumstances of a medical situation are not spelled out in the living will.
- Choose a person for your power-of-attorney and health care proxy carefully. The person you designate for each of these should be someone you trust, someone who will protect your interests, and someone who is capable of making decisions under stressful and emotional circumstances.
Read more about advance directives
- Decide whether some assets would be better protected in a trust. Trusts are used to distribute assets privately without the probate process, which can be long, cumbersome, and expensive.
Read more about trusts
- Review your entire estate plan regularly to see if your wishes have changed and if something needs to be altered. This is especially important if you have been through a divorce or another major life adjustment and want to change a beneficiary or the person responsible for your financial or medical decisions.
- Do not be afraid to ask for help. Decisions about your future and your family’s future are important and deserve attention. Find an attorney you trust to provide up-to-date information about Massachusetts laws and help you put together your plan. Make your attorney aware of your complete family and financial situation so they can help you make your estate plan as complete as possible.
Have a question about these tips or creating your estate plan? Contact us now
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