Organizing Your Estate Planning
by: Janet L. Hall
- As a little girl, I grew up in Palm Beach County, FLA, not in the rich, elite
section, but in the very small town of Palm Springs. I recall very clearly
taking drives along A1A into the town of Palm Beach while relatives and friends
pointed, ooh’d, and awed at the various estates and mansions. And so I grew up
believing an estate was something ONLY the rich owned. It wasn’t until
recently, four years ago to be exact, that someone started talking to me about
estate planning, pointing out to me why and how they were implementing their
plan. I looked at this person and said, very innocently, "I know you own
two houses, but you don’t own a mansion! Why would you need to do such a
thing?" My eyes and my mind were awakened to something I would NEVER have
thought of looking into until that day.
Maybe you have thought the same as I did, Estate Planning is for the rich and
famous. NOT TRUE! Everyone needs to do estate planning, because let me tell you
something, the state in which you live, the federal government, and the IRS have
plans already in place for how to distribute and tax your stuff! I’m talking
about your property, possessions, and even your children. (For those that live
outside the US, please check with your local government and attorney for their
plans for your stuff!)
By you not taking the time to plan for what happens to your stuff, your family
and heirs only gain more suffering and heartache after you’re gone or become
incapacitated. You need to take control of your stuff NOW!
Do you know the repercussions your family and heirs might have to endure if you
haven’t planned? The anguish, inconvenience, and possible financial burdens
they might have to face because you didn’t plan?
Yes, Estate Planning takes time and effort. It can be emotional and trying. BUT
you will be able to leave this world (or if you become incapacitated) knowing
you did the best for your family and heirs. That they will be able to celebrate
your life or mourn your departure without the legal and financial hassles if you
have planned.
- Can you imagine the state deciding who should care for your children?
- Can you imagine your family trying to scrap together money to keep the place
they’ve called home?
- Can you imagine your business being sold off, leaving your family without
income?
One aspect of Estate Planning is to allow you to take advantage of gift and
trust laws so that you may be able to pass on more of your assets tax-free to
your family and heirs. You aren’t cheating the government; you’re cheating
your loved ones if you don’t plan!
Another aspect of Estate Planning is to give control to someone you trust if you
should become incapacitated.
As of this year, 2000, the Estate tax-exemption level is currently $675,000;
however, this is said to be increasing yearly.
Why do Estate Planning?
- To distribute your assets
- To eliminate or reduce federal and state estate taxes
- To avoid unnecessary high costs in legal fees and taxes to your heirs
- To pass on tax-free the maximum allowed assets (these figures seem to be
changing yearly)
- To make sure things get handled the way YOU want them to be handled
What is taxable?
Many of the items that are taxable can include: Life Insurance, IRA and other
Retirement benefits, Investments, Bank Accounts, Personal Property,
Collectibles, your business, your home, and other real estate.
What do I need?
Some of the things you will want to look into, research, and ask about are:
- Durable Powers of Attorney – this document transfers authority to another
TRUSTED person to manage your finances.
- Health Care Powers of Attorney – this document gives someone legal
authority to act on your behalf with regard to your health care.
- Living Will – this document will provide instructions as to the type of
medical treatment that you prefer.
- Will – a document in which you can name an executor to oversee the
settlement of your estate, outline what and how you want your assets and
property distributed, and name a guardian to care for your children.
- REVOCABLE LIVING TRUST with Power of Attorney - I urge you to get this!
Unlike having a will or no will, you skip probate, it’s more flexible, you
have maximum control, you maintain privacy, and you save time in passing on your
stuff. This document transfers your assets from you to the name of your trust.
You still retain your rights and control the assets but you LEGALLY do not OWN
anything. If you become incapacitated, coma, Alzheimer’s disease, or die, the
court CAN NOT take control of your assets if you don’t have any. With this
trust, married people can split their holdings into two separate trusts and then
double the amount that is free of estate taxes. This arrangement makes it
unnecessary to have a Will; however, you will want to have a Pour Over Will.
- Pour Over Will – this document deals with everything that you might have
forgotten to put in your trusts and those assets should * pour over * into the
trusts.
Estate Planning can cover, but not limited to, wills, trusts, insurance, estate
taxes, gifts, gift taxes, and income.
You will need to form a team of reliable, dependable, and competent people in
the following areas:
- Estate Planning Attorney
- Life Insurance Underwriter
- CPA
- Development Officer
- Financial Planner
- Captain-This is YOU. You are the Captain of the team; it’s what YOU want to
be done, your wishes. Your team is there to help you make the best choices for
your life and your families.
Don’t let this list of people scare you. A good financial planner and some
attorneys are set up to perform many of these functions. Ask around, get
recommendations.
PARENT TIP: Your parent’s plan may affect your plan! If you don’t know what
they have planned, then discussing this with them might be the most difficult
thing you’ll have to do in estate planning. Many older parents downright
refuse to talk to their children about such matters. Talking of such things
might conjure up in their minds that you’re after their money, that it’s
none of your business, or you’ll find out when we’re gone. Speak to them
calmly and clearly and let them know what YOU are trying to do, that you are
taking control of YOUR finances, that you are getting all your ducks in a row
and how THEIR ducks might affect yours. Share your plan with them and show them
what you are trying to accomplish. Hopefully if they have a plan, they will
share with you, and if they don'’ have a plan, maybe they will learn something
from you and get one of their own.
CHILDREN TIP: Don’t forget to also talk to your children, if they are of an
age that you can discuss these matters with them. Maybe you already have grown
children and grandchildren and you may be able to contribute in some unique and
different ways to them.
RELOCATION TIP: Property transfer laws differ from state to state. Review your
estate plan when you move or retire to a different location.
Birth, death, marriage, divorce, inheritance, purchase or sale of assets are
many reasons why you should review your plan when you have these or other
lifestyle changes. If you don’t have any changes, a review of every three to
five years is advisable.
Congratulations! After you have your Estate Plan in place, your financial area
should now be "OverHalled" and Balanced. Now it’s just a matter of
maintaining this area of your life to keep it this way. Don’t forget to
schedule routine reviews of your net worth (http://www.overhall.com/april00.htm
),
budget (http://www.overhall.com/may00.htm
),
retirement plan (http://wwwoverhall.com/aug00.htm
),
investments (http://www.overhall.com/sept00.htm
),
protection plan (http://www.overhall.com/oct00.htm
), and your
estate plan (http://www.overhall.com/nov00.htm
) any time you have a lifestyle change.
==============
Janet is a Certified Professional Organizer,
Certified Pyramid Feng Shui Practitioner, Speaker, and Author
and can help you regain control of your life, your time, your
stuff, and your environment. FREE newsletter, OverHall IT! at
http://www.overhall.com/newsletter.htm
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