Estate planning appeared simpler in the past because it consisted of individuals getting their affairs in order, including making sure that their families and finances were taken care of. Baby boomers appear to have a different plan: they want to make a difference in the world after their deaths by leaving a legacy. However, federal tax rates and expiring exemptions have proven to be quite a challenge for many Texas residents, and planners are recommending that people start thinking of estate planning prior to retirement.
Many planners advise listing the locations of every necessary investing and legal document as well as preparing a list of all money accounts. In addition to their retirement accounts, people should consider all other assets, including life insurance, money that they might inherit in the future and amounts already in trust. Experts advise individuals to discuss their wishes with their loved ones.
During the estate planning process, many people choose to select a power of attorney, which is an individual selected to handle financial affairs. While some powers of attorney may have a broad amount of duties, others may be commissioned only if the person whom they represent becomes incapacitated. That person should be aware of the grantor’s accounts and the values contained in each.
Trusts can be beneficial because they may serve as a shield from creditors, including any future ex-spouses. Depending upon how it is structured, a trust may also be less likely to be vulnerable to estate taxes in the future. However, income taxes may be higher within the trust than outside of it.
Those considering leaving assets to loved ones may wish to speak with an estate planning attorney, who may be able to explain the laws and how they pertain to them. An attorney may be able to offer various options so that those in the planning process can make informed decisions as to how to proceed.
Source: Fox Business, “How to Make Estate Planning Less Complex”, Casey Dowd, August 22, 2013