Tips for estate planning
Far too many people think, “I don’t have an estate. I don’t need to do any estate planning.”
But there are more aspects to estate planning than just signing a will. Medical, current financial and other decisions also play an important role.
The differences between the similar sounding living will and living trust often cause confusion. The first is for medical purposes; the other is financial.
A living will provides authority for certain last medical measures when in a terminal condition and has nothing to do with transferring assets or property after death.
A living (or revocable) trust is a financial method that provides for the succession of ownership of trust assets much like a will does, as well as allowing control of the trust’s assets by a professional manager when appropriate. There are also irrevocable trusts which can provide important benefits in estate planning.
Other important estate planning documents are powers of attorney.
These documents deal with the authority given to others to make medical and financial decisions under the limited conditions stated in them.
This will assure that someone will always have the power to act on your behalf, which can prevent having to go into court to secure such authority at a crucial time.
It also pays, while you’re doing your estate planning, to check on the beneficiary that you have chosen for your life insurance proceeds and retirement funds. Neither will be controlled by your will unless your estate is the beneficiary, which is not always the most financially appropriate choice to make. For example, naming your estate as the beneficiary of your retirement funds can lead to more income taxes being owed because of the short payout period when an estate receives such funds. Extra taxes may not be what you had in mind.
Something else – while you are free to provide nothing from your estate for your children, you cannot “cut out” your spouse. West Virginia law allows a spouse who has received nothing or an inadequate amount to claim a percentage of the deceased spouse’s estate.
The percentage the spouse receives is based on the number of years married.
A maximum of 50 percent of the combined estate can be claimed by the surviving spouse who was married 15 years or more to the deceased person.
So, while a will controls major aspects of one’s estate, it’s not the only document that can protect your property and your well-being.
That’s good planning.