Connie Maxwell Children's Home
Providing A Future For The Children Of Tomorrow
Better Estate Planning
The term estate planning means different things to different people. And it should, because a good estate plan reflects the uniqueness of the person creating it. In its broadest sense, estate planning covers the process of accumulating, managing, and distributing property over the course of a lifetime. On this page, we'll outline the estate planning process - a process of integrating personal financial goals with provisions for others who may survive us.
What if you decide not to make an estate plan?
In that event, your state of residence will step in and apply an all-purpose plan.
What may happen?
- Someone you do not even know may be appointed to settle your affairs.
- The state will direct this person to distribute your property according to state law, which assumes you wish to treat all recipients more or less equally, regardless of need.
- No charitable giving wishes will be considered, regardless of your philanthropic interests during lifetime.
Most who have witnessed the application of the "state-made" plan would agree that it is much better to take advantage of your right to make your own plans. See your advisors for more information about the laws of your state and for assistance as you make plans for the short- and long-term management and disposition of your property.
An organized approach to estate planning can bring order to what may otherwise be an overwhelming task. Focus your planning on the "Four Ps": people, property, plans, and planners.
- People: A good place to begin with is a listing of the individuals for whom you are responsible, beginning with yourself and continuing with (if applicable) your spouse, children, parents, and any others for whom you bear economic responsibility. You should choose to include your charitable interests in this list as well.
- Property: Next, make a list of all property you own or expect to own in the future. Include bank accounts, real estate, stocks, bonds, the value of life insurance proceeds, pension plan balances, and personal property. Beside each item, place a conservative estimate of its current value and original cost.
- Plans: After listing the people and property in your life, think about what you wish to achieve financially over the remainder of your life. Do you anticipate having adequate income to support yourself and your dependents? Who would you like to receive your property when you no longer need it? Would you like for an heir to receive property, an income, or both? At what age? Will a trust or other vehicle be necessary in order to carry out your wishes?
- Planners: To make sure your estate plan performs as you intend, the assistance of one or more advisors will normally be necessary. You may need to call on your attorney, accountant, or bank trust officer, for example.
After you have given due consideration to the people in your life, your property, your plans, and the planners you wish to involve, it is time to begin implementing your plan. Like a building project, you will start with a blueprint, and with the help of advisors, you will give shape to your abstract plan. Your planners can help you explore the advantages of one or more of the following estate planning tools.
- A well-planned will is the cornerstone of almost every estate plan. Through a will, not only can property be distributed, but provisions can be made for recommending guardians for minor children. You can also provide for the management of assets should a recipient be unable to manage property left to him or her due to age or other factors.
- As the name implies, a trust is a vehicle whereby you can entrust property to a person or institution with instructions to manage it on behalf of one or more persons for a specifies period of time. At the end of that period, the trust is said to "dissolve" and assets (the "remainder") are distributed as the trust directs.
- It is wise to make provision for someone to handle your financial affairs should you be unable to do so. Under a so-called "power of attorney", property management and disposition rights can be granted to another. Your attorney can provide details.
- Many people use "living wills" to make known how they wish to be treated if ever faced with a terminal illness. A living will tells your physician and others how far you wish to go in having your life prolonged through artificial means. More and more, the living will plays a role in estate plans.
Additional information about effective charitable estate planning is available upon request. Simply call Eric Taylor, Director of Planned Giving, at 1-800-868-2624 or send Eric an e-mail request.