Let’s face it: Nobody lives forever. No matter how much you want to deny it, you need to prepare for this fateful event. Your loved ones will have some tough and critical decisions to make, from handling funeral arrangements to managing your financial matters.
At your death, all the assets you own, whether it’s your bank balance or your antique quilts, have to be parceled out to family and friends—hopefully according to your wishes. Titles to your stocks, real estate, and cars must also be passed on. This process can be incredibly unsettling to those you leave behind and unfair to those least able to fend for themselves, financial advisers warn, so it's best to do the groundwork while you're still breathing.
Besides, one of the most important reasons for accumulating wealth is being able to pass it on to your children and your grandchildren. Transferring wealth to the next generation requires that you engage in solid tax and estate planning, says Danny Freeman, a financial adviser with Darda Wealth Management in Winston-Salem, North Carolina.
Make matters less complicated for your survivors by following these solid steps:
Step One: Take inventory of your assets. Your estate ultimately includes your investments, savings, insurance policies, real estate, and business interests. What will be the value of your property when you die (i.e. equity investments, real estate, and personal property)? What debts will you owe (i.e. mortgage)? What deductions will be taken from your estate (i.e. administration costs and marital deductions)?
Step Two: Draft a will. “The biggest mistake people make is to die without a will or any other estate planning,” says Lori Anne Douglass, a partner with the New York-based law firm Moses & Singer L.L.P. A will allows you to appoint the person of your choice to handle your estate administration.
This representative, known as the executor, is appointed to distribute your property in accordance with the terms of the will.
When someone dies without a will, known as dying “intestate,” your property will be distributed according to the laws of your state and the person in charge will be appointed by the court. “This can be costly to your heirs and leaves you no say [in] who gets what portion of your assets,” Freeman says.
Moreover, a will is the only document that can appoint physical guardians for minor children in the event of death of the sole caregiver parent or both parents.
Hire an estate planning attorney to help you draw up a will, no matter how simple a document, he suggests. Also, you should review and amend your will periodically, especially after major life changes such as marriage or divorce.
Step Three: Reevaluate your beneficiary designations. Who are the beneficiaries for your 401(k), IRA, pension, and life insurance policy? These accounts will automatically go to your named beneficiaries when you die. You need an entire organized plan. For example, minors cannot inherit assets, including life insurance proceeds.
Step Four: Name a financial power of attorney and medical
It's the first time I commented here and I must say you share genuine, and quality information for bloggers! Great job.
p.s. You have a very good template for your blog. Where have you got it from?
Reply
[...] Money Management Principles 8. I Will Support the Creation and Growth of Minority-Owned Businesses 9. I Will Guarantee My Wealth Is Passed On To Future Generations Through Proper Insurance And Estate... 10. I Will Strengthen My Community Through [...]
[...] Money Management Principles 8. I Will Support the Creation and Growth of Minority-Owned Businesses 9. I Will Guarantee My Wealth Is Passed On To Future Generations Through Proper Insurance And Estate... 10. I Will Strengthen My Community Through [...]
[...] Money Management Principles 8. I Will Support the Creation and Growth of Minority-Owned Businesses 9. I Will Guarantee My Wealth Is Passed On To Future Generations Through Proper Insurance And Estate... 10. I Will Strengthen My Community Through [...]
[...] Money Management Principles 8. I Will Support the Creation and Growth of Minority-Owned Businesses 9. I Will Guarantee My Wealth Is Passed On To Future Generations Through Proper Insurance And Estate... 10. I Will Strengthen My Community Through [...]
[...] Money Management Principles 8. I Will Support the Creation and Growth of Minority-Owned Businesses 9. I Will Guarantee My Wealth Is Passed On To Future Generations Through Proper Insurance And Estate... 10. I Will Strengthen My Community Through [...]
[...] Money Management Principles 8. I Will Support the Creation and Growth of Minority-Owned Businesses 9. I Will Guarantee My Wealth Is Passed On To Future Generations Through Proper Insurance And Estate... 10. I Will Strengthen My Community Through [...]
[...] Money Management Principles 8. I Will Support the Creation and Growth of Minority-Owned Businesses 9. I Will Guarantee My Wealth Is Passed On To Future Generations Through Proper Insurance And Estate... 10. I Will Strengthen My Community Through [...]
[...] management principles. 8. I will support the creation and growth of minority-owned businesses. 9. I Will Guarantee My Wealth Is Passed On To Future Generations Through Proper Insurance And Estate... 10. I Will Strengthen My Community Through [...]
[...] Money Management Principles 8. I Will Support the Creation and Growth of Minority-Owned Businesses 9. I Will Guarantee My Wealth Is Passed On To Future Generations Through Proper Insurance And Estate... 10. I Will Strengthen My Community Through [...]