Exit Gracefully

Follow these safeguards to make sure wealth is transferred to the next generation

case your first choice becomes unable or unwilling to serve.

No matter whom you name, try to make life as easy as possible for your executor. Leaving a letter spelling out who should receive your artwork, furniture, and so on, if such items are not covered in your will, is helpful. Create an organizer that shows where to find brokerage statements, life insurance policies, and other key documents.

“I’ve personally used kits from Homefile Publishing and I recommend them to our clients,” says Holland. “They make it easy for you to organize your financial information, which can be a huge help to your executor.” Go to www.homefile.com or www.homefile.net for details. For more general help, turn to The Executor’s Guide: Settling a Loved One’s Estate or Trust, 2nd Edition by Mary Randolph (Nolo, $34.99).

Sometimes an estate plan calls for a power of attorney. A power of attorney is created when you give someone else authority to act on your behalf. That person can sign contracts, liquidate investments, etc., for you while you are still alive. In legal terms, you are known as the principal and the person to whom you give authority is the agent. A nondurable power of attorney takes effect immediately and remains in effect until the principal revokes it, becomes mentally incompetent, or dies; a durable power of attorney remains in effect even if the principal becomes incompetent, and a springer power of attorney “springs into effect” when a specific event takes place, such as
the principal becoming incompetent or disabled.

Lori Anne Douglass, attorney for Kurzman, Eisenberg, Corbin, Lever, and Goodman L.L.P., says the terms “durable,” “non-durable,” and “springer,” refer to when the attorney has authority to act. However, what you designate the power of attorney to oversee is what is most important. A financial power of attorney allows someone you trust to handle your financial matters should you become disabled or incapacitated. A medical power of attorney allows someone to make medical decisions on your behalf if you cannot. “A will only takes its life upon your death,” Douglass explains.” So, even if you have an executor of your will, that doesn’t help at all if you become disabled and can’t handle your finances.”

Trusts offer their creators control over their assets. “A trust can provide continuity of financial management during your lifetime, after your death, or both,” says Miller. “If you’re concerned about what will happen to your assets in case of incapacity or when you die, you should consider creating a trust.”

You can create a trust during your lifetime and re-title your assets so that they are actually owned by the trust-not by you. If you have a revocable trust-one that can be cancelled-you can elect to be the trustee-the individual who manages the assets in the trust. You can also be the trust beneficiary. In this way, you remain in control of your own assets.

However, you’ll also name a successor trustee or a co-trustee. “If you become

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