Estate plan is a necessity
It is not possible to consider all the situations and decisions that you and your family may face. But creating an estate plan helps provide a framework for the thoughts, wishes and goals to be achieved. It is necessary that family, heirs and beneficiaries all have an understanding of the intentions on which the estate plan is based. There are four key components that one should consider when preparing a wellthought-out estate plan.
Step 1: Have a family meeting about the estate plan. How will you distribute your possessions and personal effects?
Step 2: Establish or update the will and power of attorneys (POAS). Discuss and explain the extent of the permission you are granting with your POA. Avoid misunderstandings with family members by letting them know why and who you have elected as your POA.
Step 3: Ensure that there is proper insurance in place for debt repayment or future tax burdens.
Step 4: Appoint a competent executor (person or service). How do you want your pets to be cared for?
The majority of adult children have talked to their aging parents, but most do this informally. Still, there are many that have not had any discussions at all with their parents. A “wait-and-see” motto never helped anyone when planning for their future or when they eventually pass away.
Estate planning conversations should really be a mandatory issue that your adviser coaches you on. I have seen all too often, when someone dies without an estate plan, will or power of attorney, the best intentions always go awry.
Here are the top five problems that come up when you die without a formalized plan.
1.
Conflicts between family members after the death of a loved one.
2.
Unexpected or unpleasant surprises after the death.
3.
Legal complications, family bickering, he-said/she-said arguments.
4.
Financial or taxation issues.
5.
Succession issues with a business, taxation, shareholders, etc.
Let's face it, the personal and relational issues in estate planning are often forgotten or assumed to take care of themselves. Yet not addressing these issues often leads to emotional stress, misunderstanding and ongoing family conflict. With just a little planning and open communication, there is the opportunity to leave behind peace, clarity and order for your family, friends and charities. Make sure you have an estate plan.