Not only are Millennials not talking about end-of-life care
with their parents, according to the American Bar Association,
"Statistical studies show that 55 percent of Americans die without a will
or estate plan." In order to save your loved ones completely avoidable
additional pain and legal hassles, take the time to begin your estate planning
today.
Estate Planning 101
First and foremost, when you begin discussing end-of-life
care, it is essential to understand the documents involved.
- Wills: Your
will outlines who will be in charge of your estate at the time of your death.
Designating the executor of your will is just the first step.
- Living
Trust: The "preferred" method of transferring assets upon
your death, a living trust can help your loved ones avoid probate when you pass
away. Trusts typically contain personal property and documentation indicating
what should happen to these assets once you've died.
- Durable
Power Of Attorney: This document ensures a person of your choosing has
the authority to make decisions regarding your life if you are
"incapacitated" or unable to make decisions on your own. This
includes financial and legal decisions.
- Health-Care
Proxy: Similar to the durable power of attorney, your medical power of
attorney has the authority to make medical decisions on your behalf if you are
unable to make these decisions yourself.
- Advanced
Health Care Directive: This form allows you to list your healthcare
preferences; it can be used in conjunction with your health-care proxy to ensure
that decisions regarding your medical wishes are enacted as closely to your
wishes as possible.
- HIPPA
Release Form: When dealing with medical issues, another hurdle that
can be prevented by preemptive preparation is a HIPPA release form. This form
allows those people listed on your advanced health care directive, in addition
to your health-care proxy be allowed to access your healthcare information so
they can deal with matters on your behalf should you be unable to.
- Tax
Documents: We've all heard of "death and taxes," but how
familiar are you with "taxes in death"? That's right. Death, while
inevitable, doesn't stop taxes. Even once you have left your physical body,
your essence can be taxed. While the majority of taxpayers do not meet the
requirements (and therefore do not have to worry about federal estate taxes),
it is important to be aware of their existence. While the "magic
number" so to speak is $5.25 million + as taxable by estate taxes, there
are some exceptions. Certain types of property may be considered part of your
estate by the government, such as life insurance policies, pensions, retirement
plan funds and past sizable gifts. Furthermore, some states have a state death
tax in addition to federal estate taxes.
Why Now Is The Best
Time To Plan
If you don't plan now, and the unimaginable becomes reality,
your loved ones will face legal obstacles, hurdles and battles that could have
been avoided. By simply taking one afternoon to talk to your legal advisor,
personal planner or lawyer, you can help your loved ones avoid unnecessary
costs, financial duress, legal headaches and additional pain.
Always be prepared for the worst. Don't take on a
pessimistic outlook toward life, but as a way to ensure you enjoy life to its
fullest, make sure you and your loved ones are covered in case the unthinkable
occurs.
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