Another box of chocolates, another dozen roses, but after Valentine’s Day has been and done, and these are fleeting moments. What is not fleeting is an estate plan, which may not sound romantic until considering how much an estate plan shows your love.
We’re not kidding.
An estate plan includes a will. That gives your loved ones security, in knowing you have planned for their well-being after you are gone. A surviving spouse will know what your intentions are and, if they are named the executor, be able to put your plan into effect.
Without a will, your surviving spouse and family members must go to court and an extensive process to determine what happens to your assets. The time and expense in settling your estate far exceed the cost of a proper will.
An estate plan also includes trusts. A trust can be either created while you are living or in your will. The use of trusts can prove essential to protecting your family from outside claims such as healthcare costs and marital and creditor claims. It is a great kindness, ensuring that your loved ones can access assets (depending upon the terms of the trust) and have one less pile of paperwork to deal with.
An estate plan addresses taxes. While most Americans do not come near today’s current federal estate tax exemption of $11.7 million per person, odds are the estate tax exemption will soon be reduced to somewhere between $3.5 million to $5 million. This will cause a tenfold increase in taxable estates. And there are state taxes to deal with and taxes on certain inherited assets. Creating a comprehensive estate plan address tax issues, including retirement accounts and real property. Tax planning could make a significant difference in the quality of life for your surviving spouse.
Estate plans include documents that protect you and your family while you are living. A health care proxy will give your loved ones the ability to decide on your behalf if you are severely sick and cannot communicate your wishes. An Advance Directive will clarify your wishes for end-of-life care.
Think of the stress alleviated if your spouse need not play guessing games about what you want to happen. And the years of guilt if they decide in haste and during the high emotions of your illness without knowing what you wanted.
A few other steps to take to complete your estate plan:
- Review your power of attorney to make sure it is still current and valid.
- Review your life insurance beneficiary designations.
- Review all accounts with beneficiary designations to ensure you still want the people named to receive your assets.
You can always go out to dinner or send your true love a gift. But the gift of an estate plan demonstrates love in a much deeper way – by showing your loved ones you care enough about their lives when you are not with them.