(ARA) - When it comes to planning a party, most
people are sticklers for details. They make sure they have enough food,
the right music and the perfect theme; yet when it comes to estate planning,
the majority of Americans fail to take the steps necessary to protect
their assets.
“There are many reasons people put off estate
planning, the primary one being no one wants to think about their own
mortality, but if you don’t, your family will suffer the consequences,”
says Michael W. Halloran, a director with the National Association of
Estate Planners and Councils (NAEPC), an organization made up of professional
estate planners and affiliated Estate Planning Councils.
The NAEPC’s primary mission is to educate the
public about the importance of planning ahead. Halloran recommends the
first step you take is putting a planning team together. “Don’t think
you can do it all yourself,” he says. “There are just too many details
to worry about.”
Some of those details may include writing a will,
setting up a trust, appointing a guardian for young children , naming
a beneficiary and dividing up assets. Among the professionals you should
consider hiring to help you make decisions, a state certified estate
planning attorney or estate planning specialist (EPLS); a certified
public accountant (CPA), practicing in the estate planning area; a chartered
life underwriter (CLU); a certified financial planner (CFP); a chartered
financial consultant (ChFC); a trust officer; and an accredited estate
planner (AEP).
Here are some tips to help you put together a
plan that will give you and your family some peace of mind:
* Draw up a will. Dying without one increases
costs, takes away control of your family's assets and adds stress for
your family.
* Keep all your valuable papers together such
as insurance policies, wills, bonds, investment records, birth certificates,
marriage certificates and social insurance numbers. Be sure your family
knows where they are; don't leave a game of "hide & seek.”
* Review your life insurance policy and keep
your program up to date. It is the most cost effective way to create
the cash to pay bills and provide income.
* If you have insurance, consider a named beneficiary
if it is appropriate. If you name your estate it could slow down receipt
of monies to pay bills and provide income. Having the proceeds paid
to the estate increases executor's fees and gives one more opportunity
for the proceeds to go to the wrong people.
* Explore leaving property and investments as
"Joint with rights of survivorship" so ownership can be changed with
the least cost, "red tape" and time delay.
* Keep some of the assets "liquid" so that there
is cash to pay bills upon death. If not, this takes away the flexibility
to preserve the value of the estate and to avoid a forced sale of assets.
* Suggest to your potential survivors that they
seek advice and do postmortem tax planning. If you've done a good job
of creating your estate, your family will need competent advisors to
help manage the assets.
* Annually, fill out a Net Worth Statement showing
a detailed list of what your assets are, where they are and their current
value. Do an Income Statement showing all current income sources, but
also a list of the type of income and amounts which continue after death.
Once you have your plan in place, make sure you
discuss with your family or professional advisors how you want your
estate to be distributed. Don't keep everybody in the dark until the
end. For more information about estate planning, log onto the National
Association of Estate Planners and Council’s Web site. The address is
www.naepc.org or call NAEPC toll free at (866) 226-2224.
Courtesy of ARA Content
