By: John Farrell
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Essential Elements of an Estate Plan – National Estate Planning Awareness Week
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Why is Having an Estate Plan Important?
We are often surprised when we hear of celebrities who pass away without a Will or some other type of estate plan, but statistics show they are simply like most Americans who take an ostrich approach to estate planning. A recent poll suggested that 55% of American adults do not have a Will or other estate plan in place. So, to raise awareness of this issue, Congress designated the third week in October as National Estate Planning Awareness Week.
Elements of an Effective Estate Plan
There are several elements to a good estate plan. The first among them is having a Will. No matter how old or young, rich or poor, everyone should have a Will. In Georgia, if you do not have a Will, the State of Georgia will decide who gets your assets after you pass away.
Second, you should decide, after receiving advice from an established estate planning attorney, whether you should supplement the Will with some type of Trust. The most common reason to set up a Trust is to avoid the probate process. Other trusts could result in tax advantages, help to protect property from lawsuits and creditors, or help people qualify for Medicaid.
Third, everyone should have a healthcare power of attorney, or Advance Directive for Health Care as it is known in Georgia, and a financial power of attorney. These important documents allow a trusted family member, perhaps a spouse or an adult child, to access your medical records, talk to the doctor on your behalf, or make important financial decisions for you if you ever get to a point where you are unable to do so yourself. Additionally, the Advance Directive will work as a Living Will which is the portion that allows you to state your desires and wishes regarding the withholding or withdrawal of life support systems.
Finally, you should review your beneficiary designations. Certain financial instruments, such as certain retirement plans and life insurance policies, allow you to name a beneficiary who will receive the proceeds from the plans following your passing. Failing to name a beneficiary in the plan or naming the wrong beneficiaries can have lasting consequences. These beneficiary designations should be reviewed regularly as your life changes.
If you’d like to discuss these issues and have your plan set up the right way, the first time, give us a call at (678) 809-4922.