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Frisse & Brewster Law Offices
It's not about how much. It's about what's important.
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~ What is an estate?
Your estate is, simply, everything that you own. An estate consists of your investments such as stocks, bonds, mutual funds, annuities, bank accounts, and certificates of deposit; your retirement accounts such as individual retirement accounts and 401(k) plans; real estate; and life insurance policies. It also contains furniture, appliances, jewelry, collectibles, and all the other items of personal property. The value of your estate is the value of all of these assets, less mortgages and any other debt.
~ What exactly IS estate planning?
Estate planning is the process of planning for the management and disposition of your assets and resources when you are deceased or no longer able to manage your own affairs. While most people think estate planning is just worrying about assets or minimizing income and estate taxes, it is really much more. Estate planning is really about accomplishing your goals during you life and beyond.
~ Isn't estate planning just for wealthy people?
It's not how much wealth you have accumulated that's important; it's about what and who are important to you. Take as an example a widow with two grown children who has only a house and $50,00 from a life insurance policy on her late husband. Does she need estate planning to protect herself and her two children? To some people, $50,000 isn't a lot of money. Even so, the widow wants to be assured that she can live in comfort in her own home. What if her son has an alcohol problem? Wouldn't she worry that he will just drink up whatever amount she leaves him at her death? Wouldn't she feel better leaving the money to him in such a way that it could be used for his rehabilitation? It's not whether you have an estate that requires planning, it's whether planning will provide you with a sense of comfort and well-being about your and your family's future.
~ I don’t have many assets. Why do I need an estate plan?
Estate planning is much more than deciding who gets what at the time of your death. If you have an opinion as to whether you would prefer to receive long-term care at home rather than in a nursing home in the event that you become disabled, then you are a candidate for estate planning. If you want to choose the people who should have the power to decide if you are disabled, as opposed to leaving it up to the court system or to doctors whom you may never have met, then you are a candidate for estate planning.
~ My friend tells me that estate planning is not as important now because the estate tax has been repealed. Is that true?
Tax Basics - the federal estate tax - has not actually been repealed. But more importantly, estate planning is about far more than estate taxes. Estate planning is about achieving your personal goals for yourself and your family. Accomplishing these goals requires careful planning and professional assistance, with or without tax concerns. Yes, reducing estate taxes is a common planning goal, but it is only one of many.
~ I don’t have minor children or a taxable estate so why should I plan?
If you do not plan your estate, the state in which you live has drafted a plan for you through what are known as the intestacy laws. If you become disabled, these laws will determine who takes care of you and how. At your death, these laws will determine who receives your estate, when they are going to receive it; and if they are minors, who is going to manage it for them until they reach the age of majority. For these reasons, everyone who has assets and loves ones or favorite charities needs to plan for what should happen if they become incapacitated and at their death.
~ Do people plan primarily to take care of their assets?
Not really. People plan their estates because they care about their loved ones. They want to provide their families and advisors with clear instructions about what is important to them and how to take care of things in the event that they become disable or when they die. Many of our clients’ children tell us that the time we take to detail and communicate our clients’ wishes through their estate planning documents provides them with a great deal of comfort and confidence especially when they are called upon to act on behalf of a disabled or deceased family member. They tell us that since the plan already makes the rough decisions for them, it takes the burden off the family to make numerous choices during this difficult time.
Estate planning also lets people have one last “conversation” with the ones they love. As with disability, the depth and clarity of the instructions on death ease the grief experienced by the family since the hopes, dreams and aspirations of the deceased person have been expressed through their estate plan. Many children express gratitude that their mothers or fathers cared enough about them to put on paper the things that were most important and to provide guidance.
~ Can I promote my values in my estate plan?
Perhaps one of the most important reasons to create your estate plan is to pass on your values and beliefs. These values can include your beliefs on religion, education, marriage, work ethic, and the use of drugs or alcohol. For example, you can encourage family members to get a college education by providing to pay for tuition in your estate plan and even offer them a “bonus” if they complete their college education in 4 years. You can discourage alcohol and drug abuse by cutting off funds from heirs who have substance abuse problems. You can promote your religious beliefs through a gift to your church or synagogue. For many people, passing on their values is more important than passing on their wealth.
~ How do I begin the estate planning process?
It requires thinking about what things will be like after you’re gone. No one likes to think about his or her own mortality. Here are some points from which to start:
* Organize your affairs to develop an accurate picture of your estate. Don’t overlook life insurance policies.
* Analyze your current estate plan. Do you have a will or trust? How are your assets titled?
* Look into the future. Your assets will most likely grow in value and may be subject to death taxes.
* Talk to your family. Have an open dialogue regarding your wishes.
*Plan a meeting with your trusted advisors to help you to establish your goals and to be sure your planning reflects your wishes.
~ Who can help me develop my estate plan?
Your planning team should consist of an attorney, an accountant, a securities broker, a life insurance agent, and a financial advisor, if possible.
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