Once you get your estate plan in order and have your 3 key documents in place, how do you decide who will carry out this plan? Whether you have a will or trust-based plan, you will need someone to make sure your plan is followed. Responsibilities of those people may include collecting your assets, paying final bills, filing tax returns, and distributing your assets to the beneficiaries.
When making your decision here are three things to consider:
- Experience. Managing assets in a trust or settling an estate may require specialized knowledge in areas like investing, taxes, and recordkeeping.
- Time. Make sure the person you choose will have the time to devote to carrying out your plan. Don’t choose someone who may get busy and let things “slip through the cracks”.
- Peace of mind. Whomever you select should be committed to impartially carrying out your plan and able to properly execute your plan. This can help avoid additional stress during a time that is already very stressful for your loved ones.
You can choose a child, sibling, or friend to carry out your plan. Another alternative is to choose a corporate trustee or executor, like a bank’s trust department or trust company. A corporate trustee has the necessary experience to administer your estate properly, and plenty of time to dedicate to carrying out your plan, even if your plan is multi-generational. You and your loved ones also gain peace of mind by having someone in charge of your plan who will not get sick, go on vacation, or become distracted as an individual might.
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There’s a common misconception that estate planning is only for the wealthy. But, don’t be fooled… it’s for anyone who doesn’t 
want to leave behind a legacy of heartache and headache! Everyone needs to develop a plan, because if you don’t the state you live in will be responsible for determining how your assets are dispersed. So, save your loved ones the hassle of dealing with the government after you are gone, and ensure that your own wishes are followed.
Although plans vary depending on each particular situation, an estate plan should consist of 3 essential documents to ensure the plan is carried out, both while you are living and after your death. These documents are a Will or Trust, Durable Power of Attorney for Finances and Power of Attorney for Health Care.
- A Will or a Trust is needed as the foundation of your plan to dictate how you want your assets distributed after you are gone. A will is also needed to name guardians for minor children.
- A Durable Power of Attorney for Finances is needed to give authority for another person, called your Agent, to carry out your financial plan while you are living and unable to make financial decisions on your own.
- A Health Care Power of Attorney is needed to authorize your Agent to make medical decisions for you when you are unable to do so.
Choosing who will help carry out your plan can be a difficult decision. You need to choose people you know and trust, and who will be able to properly execute the plan you have put in place. I recommend reviewing your existing plan, or if you have never created a plan, start the planning process today.
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I've been exploring many aspects of retirement and retirement planning in the last several weeks.
This week I want to conclude retirement by covering your estate. This is always a sensitive subject, in that it is one that we don't want to address. Statistics will tell us that 7 out of 10 people do not have wills. A will is simply a legal document that directs how your assets will be distributed upon your death. 7 out of 10? Why would you not have one? If you don't, your assets will be distributed according to the laws in the state that you reside. Your family and friends could be short-changed.
People say, "I don't need one, I don't have any money," or "It costs too much," or even, "I don't want to deal with it." Though you may think you don't have enough money to need a will, your estate comprises more than just your bank accounts. It includes your home, car, 401(k), any life insurance (which can be owned by an individual or provided by your employer), and more! You can go online and prepare your own will if you don't want to go to an attorney; however, I always recommend that you use an attorney. He or she can help guide you through topics like: personal property, real estate, trusts, and even the selection of your personal representative. Choose carefully, and by all means, this is very important. So 70% of you watching need to take some action.
Thanks for reading.
We have spent a lot of time on the financial markets, and they are very important, but this week we are going to talk about wills and trusts. 70% of adults over the age of 18 do not have a will! That's 7 out of every 10 people that are reading! 7 out of every 10.
A will simply covers how you want your assets distributed upon your death. Sounds pretty simple and believe me, it is. However, there are some important issues that need to be covered in your will, let's look at them.
(1) If you have children, who are you going to appoint as their guardian? Your first choice would, of course, be your spouse or even ex spouse if you have gone through a divorce. What if a common disaster occurred and both of you died? You want someone to raise your children who has similar values to you. Many people say that they don't need a will because they have no money, but here is an asset that is more valuable than money and you need to determine who will raise your children.
(2) Who is going to be your personal representative? You might be asking, what is a personal representative? This is the person or entity that collects your assets and distributes them according to the terms of your will. Most people choose their spouse, if they have one, children are often named, friends and family are sometimes used. Children can be used, but what if you have more than one child? Will they fight over assets upon your death, are they competent to handle your assets, do they live nearby so they can deal with real estate or local government? Lots of issues, and having a corporate personal representative has several advantages: We'll cover those in the future.