Have you ever received an invitation to a free lunch or dinner from a financial institution, encouraging you to listen to their presentation on estate planning? You probably thought it wasn’t worth your time, because only wealthy people need estate plans. Actually everyone needs one.
RumboughSo what is an estate plan anyway? It is a plan you create that allows those who are left behind at your death to know exactly what you want them to do with all of your stuff! This can be done primarily through documents such as a will and/or trust, and through organizing your personal and financial information.
I cannot stress enough how important this is. For example, do you have a will? If so, who is your personal representative? Does that person know where your will is? Does he/she know what bank you use? Do you have a safe deposit box? Where do you keep the key to it?
There are many more questions that are asked at a person’s death that, if proper planning wasn’t done, can make handling your affairs very difficult. In addition to this, decisions have to be made concerning guardianship of minor children, providing support for family members, personal items you may want to go to a special friend or family member, who to contact for legal, tax, and insurance matters, etc.
Many times, I talk to people who want to leave something to their church or other charity. Unless they make their intentions known formally in writing, the personal representative cannot make those intended gifts.
So you see, estate planning is not just dealing with how to handle vast sums of money. It is dealing with everything you own and everyone you love. Make it easy for those left behind to handle your affairs.
If you need help, you can contact your local attorney or the Baptist Foundation of South Carolina for tools to get you started. Make this your resolution before the New Year!
– Rumbough, CPA, CFP, is chief operations officer with the Baptist Foundation of South Carolina. Contact her at 800-723-7242. In accordance with IRS Circular 230, any U.S. federal tax advice contained in this communication is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing, or recommending to another party any transaction or matter addressed herein.