This originally aired on the Catholic Faith Network’s show CFN Live: https://youtu.be/Uy9_EvlFiFo While most people…
God forbid but is your family prepared?
Here are five things you should do and set a deadline – like February 14th
1. Create an estate plan. Figure out why you have been procrastinating and conquer your fears. If you need an attorney, talk to your friends and your professional contacts for a referral.
If it’s because you aren’t sure who you want to be the guardian for your minor children or who you want to be your executor or trustee or how to divide your estate, your attorney can help you decide. If you are concerned it will cost too much, call and ask them what they charge. You might find out you can afford it.
2. Review and update your existing estate plan. Take a second look. Personal and financial circumstances will change throughout your lifetime, and your plan needs to change with them. Revisions should be made any time there are changes in your family (birth, death, marriage, divorce, remarriage), your finances, tax laws, or if a trustee or executor can no longer serve.
3. Secure/update Decision Making documents. Base line estate planning – everyone over the age of 18 should have 1) a Health Care Proxy, which gives another person legal authority to make health care decisions (including life and death decisions) for you if you are unable to make them for yourself; and 2) a Living Will which provides instructions as to the withholding or withdrawal of extraordinary medical treatment: and 3) a Durable Power of Attorney, for financial decision making. In addition, a Revocable Living Trust or a Last Will and Testament for passing your assets on when you pass away.
4. Make tax-free gifts. Under current federal law, you can give up to $14,000 to as many people as you wish each year. This is a great way to reduce the size of your estate (and potentially save estate taxes) over time. For example, if you give $14,000 per year to your two children and four grandchildren, you would remove $70,000 from your estate in just one year and $350,000 in five years. (You can double these amounts if you are married.) Charitable gifts are unlimited. So are gifts for tuition and medical expenses, if you give directly to the institution.
5. Use your $5, 340,000 million exemption. Now is the time to save significant estate taxes through a gifting program. You never know what the laws will be in the future. Gifts can be made to trusts for your children and/or grandchildren so that the monies are held in a protected way. There are several strategies to consider and an experience estate planner can advise you.