Estate Planning 101
Estate Planning 101
Through my 50 years of life, I have had to deal with the loss of many loved ones. Some had everything planned (my grandmother actually took care of everything, even purchasing her own casket before she passed) and others died to young before their time without a will or trust. I have learned from these experiences the importance of planning and having either a will or trust based on your family needs and assets. Planning ahead is just good financial sense if you want your assets to be passed on to loved ones or to a favorite charity.
In the case of minor children, it is important for parents to make sure they have a will or trust and update their documents as your family expands. Each state has different laws so it is important to establish a relationship with an attorney who is an expert in wills and trusts. I highly recommend talking with your attorney or accountant to determine family needs and how your funeral will be paid for. Most families with children have life insurance that will cover these costs. Some banks and credit unions offer small insurance policies for accidental death usually up to $2,000 - $3,000. Some funerals can cost as much as $15,000.00. The cost of a casket runs between $700 to $7,000.00 or more. There are a lot of variables in the funeral business and it is not cheap to die. Cremation is the least expensive and gives the family different options for burial. We took my mother in-laws remains to one of her favorite places close to where she raised her children and scattered them on a beautiful Sunday morning. Other people may choose to purchase an urn and keep their loved ones at home. It is all a very personal choice and each family must make this decision based on the wishes of their loved ones. If you have never been through this process you will find that the funeral director can take advantage of your emotions. It is important to understand that this is a business and they will sell you whatever they can and you need to know your rights and budget when you go to plan for the loss of a loved one.
The typical cost for a standard trust varies and sometimes lawyers will base it on the size of your estate. I suggest researching estate planning and calling lawyers in your area to find out what their fee is for preparing these legal documents. An excellent resource is your local attorney bar association to find out if the lawyer you want to hire has a good reputation or not. Also word of mouth is also an excellent way to find and hire an lawyer. Trusts vs. wills will depend on the size of your estate. If you die without a will in most states, your estate will be probated. This can tie up the estate for sometimes up to years depending on the situation. A trust (revocable or irrevocable) is a good investment and in the long run preserves the estates assets and makes distribution easier for the survivors of the estate.
And though it is very difficult, it is very important to have these crucial conversations with your parents as they get older. Most loved ones have worked hard all their lives and don't want their money to go to the government or to the lawyers - they want it to go to their loved ones for college, education, etc.. Your parents can provide you with a power of attorney to help handle their financial affairs if they are unable to do so themselves.
Once you have the paperwork complete, you will the peace of mind knowing that your family will be taken care of if something happens unexpectedly. It is important to let those who you are entrusting or leaving as trustees to have a copy of the paperwork once it is completed by an attorney.
Once all completed your should have copies of your will or trust, a power of attorney if needed, a medical power of attorney if your become unable to handle your affairs and an advance directive that gives doctors your wishes in case you are in the hospital and are being treated for a medical condition.