Take No Shortcuts When Planning Your Estate

It is important to leave no stone upturned when you are planning your estate.

Some people put together some form of a makeshift estate plan without giving the matter much thought. These days, this is quite easily accomplished by using a tool that may be provided by an online marketer who sells generic legal documents such as simple wills.

Once you have taken a few moments to fill in the blanks you may print out the document, put it somewhere for safekeeping, and go through life under the illusion that you have effectively planned your estate.

In reality, you may have been better off doing nothing at all.

Unintended consequences can result when you try to create your own will. This was the conclusion that was drawn by three different legal professors who examined last wills constructed by Consumer Reports staffers using downloads and worksheets they procured online.

Doing nothing may be better than trying to go it alone in some cases, but those are certainly not your only choices. The intelligent course of action would be to work with a licensed estate planning attorney to create a well constructed estate plan that leaves nothing to chance.

Transferring Your Assets

You can use a will to state your final wishes, but you don’t have to do so. In fact, depending on your circumstances, you may be better served by a different vehicle or vehicles of asset transfer.

The specific circumstances mean everything. For example, let’s take someone who wants to leave behind assets for an individual with special needs. This person with a disability is receiving medical assistance benefits along with Supplemental Security Income.

A large inheritance could cost the beneficiary his or her eligibility because there are upper asset limits that govern these programs.

A real estate investor or business owner or professional may be exposed to legal actions. Someone in this position would want to employ asset protection strategies.

And then there is the estate tax. If your assets exceed $5.25 million in value the federal estate tax is poised to consume up to 40% of the taxable portion.  In Minnesota, the estate tax exemption is only $1 million.

Steps can be taken to mitigate your exposure and preserve your wealth.

A simple will does nothing to provide asset protection or tax efficiency, and it won’t solve the special needs dilemma.

Planning for Possible Incapacity

Incapacity planning is another important consideration. You should have a durable power of attorney for financial matters and a healthcare directive in place.

With these legal devices, you name representatives who would be empowered to make these respective types of decisions in your behalf should you become incapacitated.

A comprehensive plan will also include a living will. This type of will is used to state your choices with regard to the utilization of life-sustaining measures like feeding tubes, ventilators, etc.

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