A Will is a legal document that declares to the world how you intend for your assets to be distributed upon your death. Die without one, and the state decides who gets what, with no regard to your wishes or your heirs' needs. A Will can also mandate whom you wish to become guardian for any minor children.
Whether you are young or old you have the ability to plan in advance for different needs and while every situation is unique, here a few planning ideas that are available to consider:
- Create a durable power of attorney: This grants your spouse or other party the power to make financial or legal decisions on your behalf if you become incapacitated
- Make a transfer over time: Instead of waiting until death, you can transfer assets or property gradually to reduce the estate tax liability.
- Pay educational or medical costs: In addition to gifting up to $14,000 ($28,000 if you're married) in cash or property without tax implications, you can also distribute assets by paying the tuition (not room and board) or healthcare costs of someone.
- Buy life insurance to ensure a tax free inheritance: Life insurers are obligated to pay the beneficiaries named in the policy regardless of how a Will distributes other assets in your estate. But, if none of the named beneficiaries are alive when the policyholder dies, then the proceeds are typically paid to the policyholder's estate.
Though there are a myriad of options available when planning, that does not mean that estate planning is reserved for large estates. For many, a simple will is an effective tool to make sure that your personal and financial interests are in order.