Estate planning involves more than drawing up your will, trust and other documents. It involves making crucial decisions about who will handle your affairs not only after you’re gone, but if you become incapacitated to the point where you’re unable to make decisions for yourself or take care of your personal and financial obligations.
Further, if you have a substantial estate, there are actions you can take while you’re still alive and well to reduce the tax burden on your loved ones and allow them to keep more of the assets you’ve worked hard to accumulate and ultimately pass along.
Choosing the right executor, trustees and other administrators is crucial. It may be your first instinct to choose your spouse or one of your children. However, it’s essential to choose people who are willing and able to carry out the responsibilities of managing an estate or a trust and be will able to deal with other heirs and beneficiaries. Choosing one of your children may create conflict among siblings, for example.
Selecting powers of attorney to ensure that your wishes regarding your health care and possibly end-of-life care can be a delicate matter. Again, you want someone who can take on this responsibility and work to ensure that your choices are honored.
As you and your attorney plan your estate, you’ll get a good idea of how much it’s worth. Many people find that their estate is more valuable than they realized. There are a number of strategies to reduce the chances that part of it will go to the Internal Revenue Service (IRS).
One of these is to give money to loved ones and other beneficiaries while you’re still alive. However, you have to be cautious that you’re not giving any one person or entity so much that they have to pay a gift tax on it. This year, the annual federal gift tax exclusion is $15,000.
Therefore, if you’re considering adding one your children as an owner on your home, remember that this would be considered a gift and may well be over that limit. It’s generally better to leave someone your home in your estate plan.
Every estate plan is as unique as the person who creates it. Your North Carolina estate planning attorney can work with you to help ensure that you create one that reflects your wishes for your family and your legacy.