October 18–24, 2021, is National Estate Planning Awareness Week. The purpose of this annual event is to help educate the public about what estate planning is and why it is so important to their financial wellbeing, and to the wellbeing of their families after a family member’s passing.
Only 33 percent of U.S. adults have estate planning documents, such as a will or living trust.1 It is not uncommon to hear stories about celebrities or professional athletes who died without a will, leaving millions in assets to divide among heirs. There is often complexity created without documents outlining how a person’s assets should be divided. You may know neighbors, community members, or family members who died without a will or other planning documents, leaving the family in disarray. Without a blueprint of how assets are distributed, the deceased’s wishes may not be followed, and a court appointed executor may not be aware of the significance of a family heirloom or your intentions to potentially donate items.
Regardless of the size of your estate, planning tools can define more than who gets your money. There are multiple ways to create an estate plan, including:
- Designate who will receive specific assets after your death, including business interests, pieces of real estate, family heirlooms, or other items with special meaning to your family.
- Specify when assets will be received, which may be especially important to you if you have children who are minors or are otherwise not capable of managing sudden wealth.
- Name the individuals who you would entrust to raise your children or handle their finances for them.
- Authorize a trusted person to manage your financial matters if you become unable to do so yourself.
- Appoint a health care agent to make medical decisions for you if you can’t make them yourself.
- Help minimize taxes and settlement costs.
If you are a business owner, you have additional decisions to make. A properly drafted estate plan can also help to ensure your business transfers according to your wishes at your death, disability, or retirement. Whether you plan to gift your business to your children, sell your share to your business partners when you retire, or sell to a third‐party buyer or key employee, a plan crafted by your attorney with appropriate legal documentation is instrumental to helping plan for a smooth and effective transition.
Don’t jeopardize your family’s financial future or create unnecessary difficulties by not having an estate plan. If you already have a plan in place, make sure it is up-to-date and continues to reflect your wishes. Not sure where to start? An attorney who specializes in estate and business succession can help to advise on a wide range of planning options and help you develop a plan that fits your needs. Talk to your Federated Marketing Representative for a referral to a member of Federated’s network of independent attorneys.
This article is for general information and risk prevention only and should not be considered another other offer of insurance or legal, financial, tax, or other expert advice. The recommendations herein may help reduce, but are not guaranteed to eliminate, any or all losses. The information herein may be subject to, and is not a substitute for, any laws or regulations that may apply. This information is current as of its publication date and is subject to change. Some of the services referenced herein are provided by third parties wholly independent of Federated. Federated provides access to these services with the understanding that neither Federated nor its employees provide legal or other expert advice. All products and services not available in all states. Qualified counsel should be sought with questions specific to your circumstances. All rights reserved.
Published Date:October 19, 2021
Categories: It's Your Life