Many believe that once they’ve put into place a last will and testament, a trust and perhaps the proper healthcare proxies, they have no reason to review or reconsider their choices. Life changes on a dime and as such, your estate plan will likely change. Creating your estate plan is far different than preserving your estate plan.
Preserving Your Estate
Life doesn’t stand still; we grow, change careers, increase our wealth, marry, divorce, have children – life is meant to be fluid and as such, so should our plans for the future. The reality is we never know how long we have and even though it’s not something we want to think about, it’s what we do to protect our families. Ultimately, it means that you’re prepared for whatever the future holds and that you’ve made proper concessions to ensure your family is cared for should that happen.
If you’re the primary wage earner in your family, you no doubt worry about mortgage payments, rising interest, college funds for the little ones and much more. With so much we can’t control, there’s an empowering sense in controlling how we deal with those life events. Life insurance policies are a great way to put into place those important financial goals.
Is the IRA the Cure All?
Many Americans are choosing the traditional IRA. Every need is different, but for those who do consider IRAs, their contributions are deductible and it grows with a tax deferred foundation. Those benefits come at a cost, though.
Typically, any kind of early withdrawals result in tax penalties. Depending on your unique situation, those penalties may or may not be worth the sacrifice. Again, remember that it always comes down to options and you should explore any that are available.
Don’t Underestimate Life Insurance
Some would prefer the advantages a whole life policy brings. With fixed premiums and the same tax free benefits, there does exist the absence of a tax deductible on the contributions. That said, there also exists the option of penalty free withdrawals. This comes via loans against the policy or certain withdrawals. Early death provides families the benefits without the tax bills.
Estate Planning as a Whole
Securing proper powers of attorney for both your medical and financial decisions is crucial as it allows someone you trust to make decisions on your behalf if you’re unable to do so. With the laws changing every day, we’re in a time when not covering those bases could prevent your loved ones from even asking questions about your condition if you’re admitted unexpectedly to the hospital.
This really emphasizes important documents such as a living will and a HIPAA release form so that doctors and other healthcare providers can legally release information to those you trust. Remember, this is a rather ironclad document that can prove difficult to overcome when it’s absent. It takes a few minutes and will make dealing with insurance companies and medical personnel easier for your family.
Living trusts are also common in today’s estate plans. This ensures confidentiality, they’re less expensive and far more versatile, which is ideal in the weeks and months following an unexpected death. Finally, don’t forget the classic last will and testament. One thing you don’t want is an extended probate process. Your will ensures a more timely resolution.
To learn more about the importance of estate planning, contact Unsworth Law today. We’re here to help and can play a role in preserving your estate as you go about the business of living your life.