An effective estate plan is important for everyone yet is something not everybody takes the time to consider and develop. Effective estate planning is important because it can provide peace of mind for both the estate planner and the estate planner's family and loved ones, as well as setting out an effective transfer of assets and address other considerations as well. A few estate planning tips can be helpful for establishing a through and effective estate plan.
Properly executing a will is an important element of any complete estate plan. Without a will, state laws will determine how property is divided upon death which may not reflect the wishes of the estate planner. Certain assets, such as tax-deferred retirement accounts or life insurance policies, may have important designation rules to be familiar with. A comprehensive estate plan may also include setting up a trust which can provide for a college education or the care of a special needs child.
It is also helpful to take into account tax impacts and tax strategies that may be useful for the transfer of assets and inheritances the estate planner is providing for in their estate plan. A life insurance policy may also be able to help offset certain tax liabilities that are of concern to the estate planner. Additional important elements of a thorough estate plan can include and advance healthcare directive, power of attorney document or other elements.
To ensure the estate planner is developing an effective estate plan that is best for their circumstances and goals, knowledgeable estate planning guidance can be helpful. Overall, estate planning should be viewed as a simple and effective way to provide for family members and loved ones.
Source: Forbes, "5 Estate Planning Tips," Feb. 23, 2012