Estate Planning: 5 tips to ensure you’re on the right track

July 15th, 2013 by

There comes a point in your life when you realize that your hard work has produced something tangible and worth protecting and estate planning is the key. Often coined the “cornerstone” of your estate plan, carefully drafted wills and powers of attorney are the first step to estate planning. It is important, however, to remain cognizant of the fact that effective estate planning is a much broader picture and involves several professional advisors.

The following are a few tips to keep in mind when working on your estate plan:

Own property jointly whenever possible: there are valid reasons for spouses not to own property jointly (such as creditor-proofing), however, wherever possible, joint ownership is a useful and simple estate planning technique to avoid costs in transferring the asset upon the death of one spouse.

Hire a lawyer to draft your will: There is no substitute for competent and diligent legal advice. You may think your estate is not complicated and very straightforward to administer, however, it is often the case that certain assets are overlooked or that potential conflicts among beneficiaries are not addressed. Talking to a lawyer may save your estate significantly more than you would have saved by using a will kit.

Don’t forget about powers of attorney: Powers of attorney are often drafted together with a will. It is important, however, to understand the purpose of the documents and of the power being conferred. It is also important to be advised of the potential misuse or abuse of a power of attorney as well as possible means by which to safeguard against such misuse/abuse.

Consider the use of trusts: There may be significant tax advantages to setting up a trust. Keep in mind that when naming a disabled beneficiary, the use of a Henson trust is imperative to prevent a claw back of disability benefits.

Talk it over: Before appointing an estate trustee or guardian and before empowering an attorney through a power of attorney, discuss your decisions with those you wish to appoint in order to ensure that they are willing to act on your behalf and are aware of your wishes.

*This article is strictly informational and in no way should it serve as a substitute for competent legal advice.

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