The purpose of Money Talk is to improve readers' financial capability with research-based personal finance information.
Thursday, March 21, 2019
Recommended Estate Planning Practices
An “estate” is everything that people own in their own name
or with others. Estate planning is the process of anticipating future life
events (e.g., incapacity and death), minimizing gift and estate taxes, and
distributing assets to loved ones in the manner a donor intends rather than
according to state law. Estate planning, ideally, should begin in young
adulthood upon the purchase of assets and/or the formation of a family. Below
are four estate planning tips to consider:
Will- Ask people to serve in key positions, such as executor and guardian,
before you name them in a will. People who die intestate (without a will)
default to the “one size fits all” will provided by their state of residence.
Conflicts in Titling of Assets- Don’t make the mistake of wanting assets to
go to one person (e.g., child from a first marriage) named in a will, yet
owning them with rights of survivorship with someone else (e.g., a second
spouse). In cases where a will conflicts with titling, the title almost always
determines the asset’s subsequent owner.
Plans for Untitled Personal Property- Consider how you will distribute
items where ownership is not identified with a written document. Examples
include tools, furniture, books, dishes, collections, and jewelry.
Durable Power of Attorney- Name an “agent” to handle financial matters in
the event of your incapacity. Without one, it may be necessary for your family
to seek court appointment as a guardian or conservator if you become
incapacitated. This appointment process can be avoided with a durable power of