Wills, Trusts, Powers of Attorney, Living Wills,
10 Things Estate Planning
Can Do for You
The first step in planning your estate is identifying
your major objectives. Here are some typical objectives
and preliminary suggestions on meeting them.
1. Provide for your immediate family. Couples want to
provide enough money for the surviving spouse. They
often choose to provide this income through life
insurance, particularly for spouses who don't work
outside of the home. Couples with children want to
assure their education and upbringing. If you have
children under 18, both you and your spouse should have
a will nominating personal guardians for the children,
in case you both should die before they grow up.
Otherwise, a court will decide without your input where
your kids will live and who will make important
decisions about their money, education, and way of life.
2. Provide for other relatives who need help and
guidance. Do you have family members whose lives might
become more difficult without you, such as an elderly
parent or disabled child, or a grandchild whose
education you want to assure? You could establish a
special trust fund for family members who need support
that you won't be there to provide.
3. Get your property to beneficiaries quickly. You want
your beneficiaries to receive promptly the property
you've left them. Options include avoiding or greatly
easing probate through insurance paid directly to
beneficiaries, joint tenancy, a living trust or other
means; using simplified or expedited probate available
in all states, though sometimes only for very small
estates or if all beneficiaries agree; and taking
advantage of laws in certain states that provide partial
payments to beneficiaries while a will is in probate.
4. Plan for incapacity. During estate planning, most
people these days also plan for possible mental or
physical incapacity. This planning is especially
important for single people. Living wills and durable
health-care powers of attorney enable you to decide in
advance about life support and pick someone to make
decisions for you about medical treatment. You may also
designate a personal guardian. In addition, disability
insurance can protect you and your family if you should
become disabled and unable to work.
5. Minimize expenses. Everyone wants to keep the cost of
transferring property to beneficiaries as low as
possible, which leaves more money for the beneficiaries.
Good estate planning can reduce these expenses
6. Choose executors/trustees for your estate. Choosing
competent executors/trustees and giving them the
necessary authority will save money, reduce the burden
on your survivors, and simplify administration of your
estate. It also will reduce a court's involvement and,
in many cases, avoid paying for a bond.
7. Ease the strain on your family. Many people take a
burden from their grieving survivors and plan their
funeral arrangements when planning their estate. Or you
may simply want to limit the expense of your burial or
designate its place. You also can provide for your body
to be cremated or given to medical science after you
8. Help a favorite cause. Your estate plan can help
support religious, educational, and other charitable
causes, either during your lifetime or upon your death,
and at the same time take advantage of tax laws designed
to encourage private philanthropy.
9. Reduce taxes on your estate. Every dollar your estate
has to pay in estate or inheritance taxes is a dollar
that your beneficiaries won't get. A good estate plan
can give the maximum allowed by law to your
beneficiaries and the minimum to the government.
10. Make sure your business goes on smoothly. If you
have a small business, the operation might be thrown
into chaos upon your death. You can provide for an
orderly succession and continuation of its affairs by
spelling out what will happen to your interest in the
Checklist: Reasons to Update Your Will & Estate Planning
Once they make a will, many people will put it in a safe
deposit box or leave a copy with their attorney, and forget
about it. However, there are many reasons to review and
update your will and other estate planning documents. Below
is a checklist of events that may prompt you to do so.
□ The individuals you have named are deceased.
□ New people should be named in your will (e.g. birth,
□ Divorce or marriage.
□ New state laws. You need to periodically check to see
whether your state has enacted new laws that impact your
estate planning documents. More importantly, if you move to
a different state, don't assume that your will made in your
previous state conforms to the requirements of your new
state. Each state has its own legal requirements for making
□ Change in guardians, personal representatives, or trustees.
□ Children reach the age of eighteen.
□ A substantial increase or decrease in the value of your
□ The acquisition or disposition of a significant asset.
□ The passage of time is reason enough. You should review your
will and estate planning documents every three to five