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Estate Planning Services
What is Estate Planning?
The concept of estate planning has been around for centuries. Since “you can’t take it with you,” as the saying goes, people have always needed to make plans about how to transfer their assets. An “estate” is everything that someone owns in their own name or with others. Estate planning is the process of anticipating future life events (for example, incapacity and death), minimizing gift and estate taxes, and distributing hard-earned assets to loved ones in the manner that a donor intends rather than according to the dictates of state law. Estate planning is a critical part of the financial planning process and should, ideally, be started in young adulthood upon the purchase of assets and/or the formation of a family.
Unfortunately, thoughts associated with the process of estate planning—death and dying, incapacity, and loss of control—frighten many people into inaction. Another common barrier is procrastination. Comprehensive estate plans typically include four or five complementary documents: a will, powers of attorney (which names an agent to make financial decisions), a living will, a health-care proxy (which names an agent to make medical decisions), and, sometimes, one or more trusts.
Information courtesy of The Financial Planning Association.
Death and Dying
Only two things are certain in life: death and taxes. The death of a loved one is the most stressful life event on a commonly used scale that weighs various stress-causing events with point values. Death of a spouse, with 100 points, is the highest value on the scale, compared to 73 points for divorce and 36 points for a change to a different line of work.
In addition to shock and/or grief, there are often financial impacts upon a loved one’s death, such as a reduction in household income. Many decisions may need to be made such as investing life insurance proceeds, many forms need to be completed, and many records and documents need to be reviewed and organized. Another important task is to identify and secure available resources such as a deceased person’s employee or veteran’s benefits. Bills resulting from a deceased person’s medical and/or long-term care and unpaid debts may be another financial concern.
Death is an uncomfortable topic for people to think about—much less talk about. Thoughts such as “I’m too young to think about this,” “Death is such a morbid subject,” and “Why should I care? I’ll be dead,” are common. As a result, families often are not prepared when death occurs, which increases the emotional and financial distress involved. Experts generally agree that families that are prepared for death often have an easier time handling the grief process and legal and financial decisions related to the loss of a loved one.
Grief is the emotion felt for the loss of someone or something we love. The intensity of grief, the duration of the grieving period, and the way that grief is expressed vary from person to person and situation to situation. For example if death is sudden and violent, as it was during the events of September 11, 2001, the immediate shock will be much greater than if death is preceded by a chronic condition or terminal illness. Since nobody can forecast the exact time death will occur, it is wise to be aware that it can happen at any time and to make advance preparations that are possible and realistic.
Information courtesy of The Financial Planning Association.
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