Tag: Update

This overview presents the key issues to consider when designing and executing the best estate plan. Also, the work does not stop at signing your estate plan documents; you must also complete the follow up work of beneficiary designations, memorandum to fiduciaries, etc. The goal is to avoid the pitfall of no plan done and the disaster when wills and trusts are in place but the asset ownership and beneficiary designations frustrate the plan by having assets pass to the spouse and not the trust.

If you do nothing else after reading this, write and deliver a “Memorandum to Survivors” and review asset ownership, all as described at the end of this post.

A comprehensive estate plan can accomplish many goals, such as providing for survivors, ensuring your children are cared for, determining the flow of your assets upon your death, and reducing the amount of taxes your estate will pay while administering your estate. The most important goal is that you have peace of mind knowing that your estate will be administered in accordance with your wishes.

Estate Planning Pyramid

Constructing a pyramid can be helpful for understanding all that goes into an estate plan, much like nutrition and investments. Each level of the pyramid addresses a new level of complexity in your family and financial situation – that is, everyone needs level one, but not all need the later, more complex levels.

Pyramid: Level One

The first level of estate planning provides the most basic protections so it is most suitable to single individuals with no children and few assets. This level of estate plan typically includes the following forms:

Health Care Proxy: This document allows you to appoint people to make decisions about your health care and treatment when you are not capable of doing so. You typically select the surviving spouse and then have a first and second alternate if you wish. Some states call such documents “medical directives” or “medical powers of attorney.”

Living Will: This makes your wishes clear as to whether or not you want to have heroic means used to prolong your life.

Anatomical Gift Instrument: This allows you to have a hospital use organs and other body parts for others in need of a transplant.

Pyramid: Level Two

The second level is most appropriate for individuals in committed relationships. This level includes all the forms listed in the first level, but adds a durable power of attorney. This document grants a power of attorney to the other to manage your financial affairs if you are absent or you become incapacitated.

Pyramid: Level Three

When you have children, you want to ensure that they will be both cared for and provided for in the manner you wish. To achieve this, you need a will to appoint a guardian, for the “care,” and create a trust to manage assets, for the “providing.”

A will is a formal document that designates your personal representative or executor, any alternates, plus a guardian and any alternates for children under age 18, then instructs your personal representative to pay off your debts, and distribute your estate per your wishes.

A trust is an entity that you create and can be used for many purposes. The trustee acts as the owner of what the trust holds, while the beneficiaries get all the benefits from what the trust holds. For estate planning, trusts are used to reduce estate taxes in various ways. Trust vehicles can also describe how and when assets are distributed. For example, the grantor of a trust could insist that assets not go to children until they are age thirty-five. The trust vehicle could also provide where assets flow if all family members die without issue. For example, assets could flow to a charity or educational institution.

Providing for Survivors: You need to address how your assets and any life insurance flow after your death in order to ensure that your resources allow those who survive you to maintain the same standard of living, during their life expectancies, that you all had during your life. If your investments are not sufficient, even after making liquid certain kinds of personal property (e.g., a second home), then there …

American health care needs an updated treatment plan. The quality of care is not the issue as we have some of the best medical care in the world. People will fly in from different countries just to take advantage of our trained medical providers. But our health care policies are very short-sighted and in need of repair. I see two major flaws with our current health care system.

One is that routine preventive health care is unaffordable for many families. For many the only type of health care that they can afford is a plan with a high deductible. This type of insurance is necessary for major injuries and life-threatening situations. But in the end it leads to a lack of preventive maintenance. With such high deductibles people are hesitant to go to a doctor for the routine care that might prevent major problems down the road. And, most high deductible plans provide no dental care at all.

This is like taking a car to a mechanic only when the engine seizes up or the transmission fails. What we should be doing is changing the oil and maintaining the air pressure in the tires. Under the current state of health care this is not possible for many. As a nation we are going to face much higher costs for medical and dental care as our population ages.

The second issue is the large number of people who do not have any insurance at all. If health insurance is anything like car insurance I am forced to pay not only for my own injuries but also for the injuries of all those who choose to go without insurance. The affordable care act, commonly known as Obamacare, made an attempt to rectify this issue. In my opinion Obamacare caused as many problems as it solved but in this one area it got it right.

Obamacare certainly isn’t perfect. And Republicans are now in the process of attempting to repeal it. I can understand their logic in doing so. However, I have not seen any type of plan they have proposed that addresses the issues of preventative care and the uninsured. Whether it is Obamacare, or some other plan, something needs to be done about the large number of American citizens who live off of the hard work of others. And the fact that preventative health care is not affordable.

America is a great country. We are a very resourceful people. Most of us work very hard to provide for ourselves and our families. We should be smart enough to know how to provide high quality, and affordable, health care to all of our citizens. It may cost us more in the present but it will pay big dividends down the road.

Source by Jeff Van Fleet

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