Some may see the practice of estate planning as one that focuses in death; others prefer to focus on the brighter side: hope. Estate planning is an area of law that allows for an individual to determine how assets will be distributed, but it also does more. A properly tailored estate plan should consider the following:
- Are my medical wishes known in the event that I cannot communicate?
- Are my financial wishes known in the event that I cannot communicate?
- Am I taking advantage of tax savings?
Having tools that address these three questions can help to better ensure that your estate plan will meet your needs now, as well as in the future.
Does your plan account for medical and financial wishes?
Accidents can happen to anyone. Legal tools are available that can outline what medical wishes should be followed in the event of incapacitation and what financial decisions should be made in these same circumstances. Having these documents available can take away some of the stress of dealing with an accident or illness.
These documents provide a type of safeguard so that your wishes are known. Once this information is known family members and loved ones can focus on treatments and rehabilitation. These safeguards, referred to as medical directives or living wills and powers of attorney, are powerful legal tools.
Does your plan take advantage of available tax savings?
Another legal tool to consider is trusts. Trusts are tools that can meet a number of goals. Depending on how it is structured, it can shield the assets from creditors, it can reduce tax obligations or it can even put limitations on how the assets can be used by beneficiaries.
Should I update put together or my estate plan?
As noted by a popular Harvard Law School Lecturer, it is wise to “hope for the best; plan for the worst.” A well tailored estate plan can achieve both, while possibly helping the creator focus on the best by taking some of the stress out of the unknown.