You’ve worked hard over the years and accumulated considerable assets. But without an estate plan, your estate could dwindle as a result of taxes and other wealth transfers cost.
Although estate taxes and probate expense are a reality, you can drastically reduce them by effective estate planning and pass on a meaningful legacy to those you care about.
Life insurance is widely used in estate planning because it provides an important source of liquidity when it’s needed most – at the death of the insured. Death benefits are usually received free of income tax. And, with proper estate planning, insurance proceeds can be free of estate tax as well.
Some people think that estate planning is only for the wealthy. But it doesn’t really matter how much or how little you have accumulated. Everyone needs three basic estate planning documents to ensure that the things they have worked for and the people they have cared about will be taken care of according to their wishes after they are gone. Without a plan, the state you live in may become the final arbiter of your wishes.
- A will is a written statement of how and to whom your property will pass upon your death
- A living will/Health care Proxy – A document that lets your family members and doctors know what type of care you do or don’t want if you become terminally ill or permanently unconscious
- Durable Power of Attorney - to name someone who can handle your financial transactions and any other non-medical decisions in case you are incapacitated.
