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Organize your estate in 16 steps

Posted by Jamie Downey  September 24, 2009 06:14 AM

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While my own personal mortality does not preoccupy my thoughts, I do accept that my demise will occur. I am also cognizant there is a chance to be stricken by unforeseen disease or be involved in an accident. Should one of these events occur and the Lord checks me out before I am ready, I need to be prepared to provide an orderly close to my estate as well as an acceptable standard of living for both my wife and daughter. To accomplish this, I have done some estate planning. While everyone has different goals and objective, many estate planning techniques are universal. The following is a list of items I have undertaken to ensure my estate is in order, and can probably be used by most everyone:

• Determine objectives – Each estate is different, so you need to determine your goals and objectives. Common objectives include providing income to your spouse / children / grandchildren, avoiding estate taxes, avoiding probate, charitable giving, preserving the family business, asset protection, etc.
• List your assets and liabilities – List account numbers and other pertinent data for all your financial accounts, including bank statements, brokerage accounts, insurance policies mortgages, credit cards,etc. Also document real estate, business assets and other personal assets. Identify their location and how to access them. Identify who you wish to receive these assets.
• Create or update your will – Your will determines what happens to your possessions when you die. Without a proper will, assets will be dissolved based on state law.
• Assign beneficiaries – Many financial accounts allow beneficiaries to be assigned. If beneficiaries are assigned, the asset is not subject to probate. You should consider this for your 401(k) accounts, pension plans and life insurance arrangements. Beneficiaries need to be reviewed (and updated if necessary) every few years. Also consider setting up lifetime trusts for your beneficiaries. These tools can protect the assets and their uses for years after your demise.
• Identify an executor to your estate (you may want to also identify an alternate).
• Identify a guardian for minors and dependents, (identify an alternate as well).
• Identify a trustee, if necessary.
• Identify a durable power of attorney to handle your finances should you become incapacitated.
• Document other sources of income for beneficiaries, i.e. survivor pension benefits.
• Identify life insurance needs.
• Plan for long-term care costs and disability.
• Tax records – Make sure heirs have access to your tax records.
• Determine if you need a living trust. Creation of a living trust can help you avoid the need for probate. Upon one’s death, assets in a living trust pass directly to established beneficiaries.
• Consider the need for estate tax minimization. The estate tax exemption is fluctuating yearly under the current tax law. Congress and the President are likely to enact a permanent exemption this year of approximately $3.5 million. Significant estates need to address estate taxes with their attorney / tax accountant.
• Take advantage of the $13,000 gift tax exclusion.
• Plan for business succession. Business owners will want to ensure their business continues as a viable entity and that family members can realize the value of the business. Ensure proper business succession is complete. (The following is a link to a business succession planning checklist that I created.)

This blog is not written or edited by Boston.com or the Boston Globe.
The author is solely responsible for the content.

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ABOUT MANAGING YOUR MONEY
Local finance professionals share insights and advice on issues such as budgeting, managing debt, and retirement planning.

About the contributors

D. Abraham Ringer is a CERTIFIED FINANCIAL PLANNER practitioner and a Financial Adviser with Morgan Stanley Global Wealth Management in Boston. He is registered in MA, NH, NY and several other states to which his articles are directed. For more information please visit www.morganstanleyfa.com/ringer
Financial Planning Association™ of Massachusetts has 900 members who specialize in the financial planning process. Many of its members engage in philanthropic pro bono work in their communities, recommend legislation, elevate public awareness, promote financial literacy, and advocate for sound economic and tax policies.
Odysseas Papadimitriou is the founder of CardHub.com, a credit card and gift card marketplace, and WalletHub.com, a personal finance site. He has more than 13 years of experience in the personal finance industry, and previously served as senior director at Capital One.

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