Gaining control over our finances is usually at or near the top of all New Year’s resolutions. Suddenly now, it’s March, have you made any progress?
Good legal planning is an essential component of each family’s financial health. Effective estate planning can protect us from costly divorces, lawsuits and exorbitant transfer taxes. Why then, do half of us not even have a will?
A will to ensure that your assets are properly distributed is a great starting point, even if you’re young and healthy.
Once children enter the picture, another important part of estate planning is designating a guardian who will rear your children if something unforeseen happens. No one knows better than you which of your family should step in to raise them if you are gone. Make it part of your planning. Don’t leave your family in a divisive and costly custody battle over your children. That’s the last thing your family needs.
Insurance companies, retirement plans and probate courts will not release funds to minors. When there is an underage beneficiary, a conservatorship to oversee your child’s money will be established through the probate court. The conservator must be bonded and file regular reports to the court; all administrative and insurance costs are paid out of your child’s inheritance. The conservatorship ends and the child receives the remaining funds upon turning eighteen. Proper planning can allow your family to forego this extra cost and complication. You can keep decision making with a person you appoint and your family out of court by designating the trustee of your choice for underage beneficiaries.
A Power of Attorney allows you to name an agent who can sign documents and transact business on your behalf, if you become mentally or physically incapacitated. It’s critical to customize the document based upon your relationship with the named agent. Younger people may want to limit the agent’s authority to just paying bills, and older married people usually want to delegate full power to each other. Similarly, an advance directive for healthcare allows you to designate an agent who has your permission to speak with your medical caregivers about treatment decisions on your behalf if you are unable to speak for yourself.
A Living Trust can ease the administration of your estate while you are living if you become disabled as well as when you die. You typically serve as your own trustee until you become incapacitated and the successor trustee of your choice begins to transact business on your behalf. Upon your death, a trust can minimize your family’s contact with probate court as your estate is distributed. Living trusts can also be structured to protect personal and business assets and can be useful in qualifying for government benefits for long term care.
Though online or do it yourself estate planning kits can generate basic documents, they pose risks because every situation is unique and knowing if and how to adjust the documents is beyond most people’s experience. An experienced attorney that specializes in estate planning can be trusted with information about your loved ones’ spending issues, troubled marriages, developmental disabilities, gambling and/or substance abuse problems so that he or she can work with you to create a strategy to protect everyone. “Fill in the blanks” forms don’t do a good job adjusting to the quirks of different families.
Don’t let another month go by without planning for your family’s future. You will be relieved to have it done, and they will be grateful that you cared enough for them to have done it.
James M. Miskell received his law degree from the University of Georgia in 1993. His Asset Protection and Estate Planning Law practice is located in Lawrenceville, Georgia. He offers free educational workshops and consultations to assist clients as well as fellow professionals in creating individualized solutions.
For more information visit http://www.attorneymiskell.com/Attorney/
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