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Is Estate
Planning important ?
No matter
your net worth, it's important to have a
basic estate plan in place. AussieInsure
can set up a plan that ensures that your
family and financial goals are met after
you die.
An estate plan has several elements.
They include: a will; assignment of
power of attorney; and a living will or
health-care proxy (medical power of
attorney). For some people, a trust may
also make sense. When putting together a
plan, you must be mindful of both
federal and state laws governing
estates.
Taking
inventory of your assets is a good place
to start. Your assets include your
investments, retirement savings,
insurance policies, and real estate or
business interests. Ask yourself three
questions: Whom do you want to inherit
your assets? Whom do you want handling
your financial affairs if you're ever
incapacitated? Whom do you want making
medical decisions for you if you become
unable to make them for yourself?
Everybody needs a will. A will tells the
world exactly where you want your assets
distributed when you die. It's also the
best place to name guardians for your
children. Dying without a will -- also
known as dying "intestate" -- can be
costly to your heirs and leaves you no
say over who gets your assets. Even if
you have a trust, you still need a will
to take care of any holdings outside of
that trust when you die.
Trusts
aren't just for the wealthy. Trusts are
legal mechanisms that let you put
conditions on how and when your assets
will be distributed upon your death.
They also allow you to reduce your
estate and gift taxes and to distribute
assets to your heirs without the cost,
delay and publicity of probate court,
which administers wills. Some also offer
greater protection of your assets from
creditors and lawsuits.
Discussing your estate plans with your
heirs may prevent disputes or confusion.
Inheritance can be a loaded issue. By
being clear about your intentions, you
help dispel potential conflicts after
you're gone.
You may
leave an unlimited amount of money to
your spouse tax-free, but this isn't
always the best tactic. By leaving all
your assets to your spouse, you don't
use your estate tax exemption and
instead increase your surviving spouse's
taxable estate. That means your children
are likely to pay more in estate taxes
if your spouse leaves them the money
when he or she dies. Plus, it defers the
tough decisions about the distribution
of your assets until your spouse's
death.
There
are ways to give charitable gifts that
keep on giving. If you donate to a
charitable gift fund or community
foundation, your investment grows
tax-free and you can select the
charities to which contributions are
given both before and after you die.
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