Tuesday, May 6, 2008

Essential Estate Planning

Now that you've tied the knot and wedding planning is seemingly in your distant past, it's time to focus on another type of planning---that is, planning your joint estate.

Estate planning comes with many great benefits. It gives you the peace of mind of knowing that, should anything drastic happen to either you or your spouse, your legal and financial paperwork will be in order. If you have children, estate planning may be the only way to ensure that their future will be secure.

Many people believe that if they died tomorrow, their assets would automatically be given to their spouse and/or children. This is not necessarily true. In fact, a number of jurisdictions have quite surprising regulations in regards to people who die without a proper will. Some states will leave your spouse with virtually no protection, sometimes distributing your assets among other blood relatives instead. Don’t take the law for granted---be sure to protect yourself first!

In order to avoid legal troubles, consider drafting the following documents:

Will/Last Testament:

A will has several purposes. It calls for the distribution of your assets and assigns those assets to people whom you wish to give them to; it allows you to decide on your executor/executrix, the person who will be in charge of disposing of your assets; and if you have children, your will designates a legal guardian for them.

Health Care Proxy:

This document allows you to designate a person who will make medical decisions for you in case you become incapacitated and/or unable to make your own decisions.

Power of Attorney:

This document will designate a person for making your legal/financial decisions in the event that you are unable to make them yourself.

In addition to these documents, if you have substantial property or assets, consult with an attorney and financial representatives to determine whether additional estate planning is necessary.

Be sure to follow all federal and statutory regulations when planning your estate. Wills are thrown out of court every day for their insufficiency and invalidity. In order to avoid this phenomenon, follow these tips:

* Familiarize yourself with estate planning regulations in your jurisdiction. It is always smart to know the law!

* If possible, consult with an attorney. Estate planning costs can be minimal---and well worth knowing that your estate is taken care of!

* Sign, date and notarize all necessary paperwork. Take care to have the necessary amount of witnesses at each signing.

* Make sure that all involved parties are aware of their roles. For example, if you have picked your mother as a legal guardian for your children, be sure to talk it over with her first.

* Store all legal documents in a safe place. Keep copies at your attorney’s office or another secure venue.

* Update your documents as needed, and most definitely whenever major life changes arise.

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