Estate Planning 101

"Well, it's a relief to finally get THAT done!" That, plus a sigh, is the common reaction of people as they leave the office with their copies of freshly-signed wills. And yet it seems to take people forever to get around to "arranging their affairs". Here is our simple approach to Estate Planning that meets the needs of most people.

Joint and Mutual Wills

A husband and wife will usually leave their assets to each other, and then to their children. "Assets" are whatever you own, less what you owe, at your death, so you don't need to list your belongings or worry if they change. Your executor – the person responsible for winding up your affairs – will usually be your spouse or a child or close friend. A lawyer or trust company can do this if you don't have anyone you can rely on.

You can make specific bequests of cash or items to named people or charities. You can also prepare a memorandum of gifts to deal with valuable or household items. You can change that list any time without having to change your will or consult your lawyer.

Power Of Attorney

A Power of Attorney is commonly given to a spouse or child to manage your bank account and bills when you are no longer able to. You can have more than one, for example to your husband as long as he can do the job, and then to your child. Your original can be stored with your lawyer until it is required.

Living Will

A Living Will expresses your wishes for a natural death. It provides that heroic measures not be used to keep you artificially alive, and that drugs be administered to relieve pain.

Registering and Storing your Will

A Wills Notice (not your actual will) is sent to the Wills Registry to record the date and location of your last will. Wills are commonly stored in a lawyer's office or safety deposit box. Don't keep your original will at home where it might be destroyed in a fire. Your executor should have a copy of your important papers.

Tax Planning

There are several simple strategies that can be used to minimize the taxes your estate will pay. A common technique is to put the ownership of your home into the joint names of you and your children while you are still alive. This means title to the house passes automatically to your children without the expense of going through probate. A simple Trust Agreement makes it clear that the house is still yours.

In the few cases where more sophisticated tax planning is involved, an accountant or insurance professional can be consulted.

Funeral Planning

Many people include a provision for cremation or other last wishes in their will. But the will may not be located or reviewed until well after the funeral. A letter directed to your loved ones, with a copy in the hands of your executor, is more likely to be carried out.

We recommend you consider funeral planning with a funeral home professional. You are the best person to make difficult decisions about how you want to be remembered, not your loved ones in a time of emotional stress. Also, pre-payment of funeral expenses avoids future price inflation.

That's all there is to it. One meeting – at our office or your residence – is usually enough to make sure we understand your wishes. At a second meeting we will check the documents for errors, answer questions, and look after the formal process of signing the documents. Then you, too, can breathe that sigh of relief.