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Estate Plan Basics

Estate planning in its simplest terms is passing your assets to your heirs as quickly and tax free as possible. Assets can be transferred via Wills, ownership, by contract (beneficiary arrangements), and trusts. The best way to ensure that you have everything covered is to meet with an attorney.

Regardless of the complexity of your financial situation, your attorney will most likely start you with a basic estate plan. The basic estate plan typically includes the drafting of your Will, Powers of Attorney for Health Care and Finances, as well as Living Wills.

Wills: I have encountered many excuses for not having a Will: my estate isn’t large enough; everyone knows who should get my belongings; and so on. These are all simply that- excuses. If you do not have a Will, the probate court creates one for you. As a result, parents, siblings, and possibly even cousins could receive preferential treatment over your partner (if you’re not married), friends, or your favorite charity.

Talk with your planned executor/executrix to make sure it’s okay with him/her to be the one who settles your estate. Also, let that person know where you keep your original estate documents so s/he can easily gather them after you pass away.

Powers of Attorney: When most of us think of estate planning, we often neglect to think about those areas that can help us while alive. Powers of Attorney allow someone else to make decisions on your behalf if you cannot. These documents, drafted with your basic estate plan, spell out the decisions that someone else can make for you and the circumstances in which they can. For instance, if you were in intensive care, you might not have the capability to make your own medical decisions.

Additionally, while in the hospital, you may want to have someone managing your investments and paying your bills. Your Financial Power of Attorney may be the same person or a different person as your Power of Attorney for health care. In creating both, take your time to carefully select the person with whom you plan to place your physical and financial wellbeing. I also recommend appointing a contingent or back-up person if your first choice is unable or unwilling to make those decisions.

Even with Powers of Attorney in place, institutions in or out of your state may decline to accept them. My recommendation is to check with your primary care physician to ensure that he/she will take your forms and to make him/her aware of your intentions. Additionally, many financial institutions may only accept their own forms. As a result, I also recommend talking to your bank and financial advisor about your intentions.

Living Will: Regardless of your desire to be kept alive or allowed to die, you want to make your wishes known in writing. As part of your estate plan, make your wishes crystal clear through a Living Will.

Settling an estate is a difficult task for survivors. Not only is it an area where most people have little-to-no experience, they’re often quite emotional. By having a Will, beneficiary arrangements, and an organized system of your financial/estate documents, you can help them tremendously during this time. Even if your assets are relatively small, doing some work now could make a significant difference for your heirs.

The most important piece of estate planning is getting one in place. Meet with an attorney, your financial advisor, and accountant to determine the best course of action for your estate. Review your beneficiaries on a regular basis. You will also want to update your estate plan every five years or when you have a significant life change, a beneficiary passes away, or if estate/income tax laws change.

 

The opinions voiced in this material are for informational purposes only and are not intended to provide specific advice to any individual. Consult your legal, tax, and/or financial advisor to determine what is appropriate for your situation.

PWM

Away from the Office

December 31st – January 1st

Our office will be closed for half day on the 31st and on New Year’s Day. Have a wonderful holiday!

January 2nd – 3rd 

Debbie will be out of the office. If you need anything, please contact Woody.

January 20th 

Our office will be closed for Martin Luther King, Jr. Day.

We are always accepting donations for the local animal shelters – toys, tennis balls, collars, leashes, food, cat litter, cardboard trays, office supplies, cleaning supplies, towels, mats, washcloths, etc. We will accept donations Monday-Friday between 9am & 5pm.

Family

Fenway is on the mend from his torn ACL and back to swimming on Saturdays. Everyone has been surprised at how well he’s doing at the pool. It’s certainly the highlight of his week. I think his spirits are lifting now that he’s returning to his routine- he even likes getting back to his role as the VP of security at the office.

 

Elise had a great holiday break. We went to PA to visit my side of the family for Christmas. Heidi, Elise, and Roxy then went to Connecticut to visit Heidi’s side of the family for several days. Elise had a great time playing with her cousins, seeing her aunts and uncles, and spending time with Grandma Kate. Her break capped off with our annual trip to the Highlandtown Train Garden and a family viewing of Frozen 2.

 

We hope you have a wonderful New Year’s celebration and a great 2020!

I hope you enjoyed this month’s newsletter!

Best Wishes,

Woody Derricks, CFP®, ADPA®

President

CA Insurance License #0C40217