Planning for what happens to one’s property after death can be a tough process but the motivation comes from the security of caring for others. Without any estate planning, loved ones are forced to make tough decisions about the property of the departed within the constraints of state law, and the lack of direction can cause families to become bitter or separate. With this being the case, it’s important to think through all aspects of estate planning while still in the mental capacity to do so. What is most important about this process?
The most obvious important part of estate planning is in executing a last will and testament. This not only directs where property should go among loved ones, but who is responsible for handling the estate. Without a will, family members may be in conflict about who should act as the Personal Representative (formerly Executor or Executrix) for the estate. There may also be conflict when property must be divided by state intestacy (no will) law. This happens frequently with a person who has a second spouse after raising a family with a first spouse. The second spouse has priority as personal representative, and the estate must be divided between the living spouse and living children (who may not care for the spouse). A will relieves these questions and conflicts.
Also part of the process is in having Durable Power of Attorney given to a trusted loved one. This is for the period before death in which one may not be capable of conducting business affairs. Along with the Durable Power of Attorney, should be a Health Care Power of Attorney. This allows end-of-life decisions by a loved one and communication and recovery are no longer reasonably possible.
Lastly, it’s important to consider setting up non-probate transfers upon death to help minimize the work in probate (and prevent the estate from reaching the point of having to pay substantial Estate taxes). This can be done through “payment on death” or “transfer on death” accounts, whether checking or savings. It can also be done with other types of fungible wealth transfers like stocks/bonds/401K/etc or even retirement accounts. It is important to ask about this option on various accounts and investments. With house and land (“real property”) one can transfer the Title to a loved one during life, subject to a “life estate” by the person transferring. That allows one to live in the house/land until death, without the real property going through probate.
It’s really never too early to consider estate planning, as we never know when the Lord will come calling. Do it now, and take care of your loved ones. Make this your legacy.
