Does Your Life Include a RIPE Plan?—Part 4 (Estate)

Does Your Life Include a RIPE Plan?—Planning Tips for Retirement, Investing, Protection, and Estate Planning – Part 4 (Estate) by: Janet L. Hall

As a little girl, I grew up in Palm Beach County, FL, not in the rich, elite section, but in the very small town of Palm Springs. I recall very clearly taking drives along Ocean Blvd. into the town of Palm Beach while relatives and friends pointed out, ooded and aahed the various estates and mansions. And so I grew up believing an estate was something ONLY the rich owned. It wasn't until recently, four years ago to be exact, that someone started talking to me about estate planning, pointing out to me why and how they were implementing their plan. I looked a this person and said, very innocently, "I know you own two houses, but you don't own a mansion! Why would you need to do such a thing?" My eyes and my mind were awakened to something I would NEVER have thought of looking into until that day.

Maybe you have thought the same as I did, Estate Planning is for the rich and famous. NOT TRUE! Everyone needs to do estate planning, because let me tell you something, the state in which you live, the federal government, and the IRS have plans already in place for how to distribute and tax your stuff! I'm talking about your property, possessions, and even your children. (For those that live outside the US, please check with your local government and attorney for their plans for your stuff!)

By you not taking the time to plan for what happens to your stuff, your family and heirs only gain more suffering and heartache after you're gone. You need to take control of your stuff NOW! Do you know the repercussions your family and heirs might have to endure if you haven't planned? The anguish, inconvenience, and possible financial burdens they might have to face because you didn't plan?

Yes, Estate Planning takes time and effort. It can be emotional and trying. BUT you will be able to leave this world (or if you become incapacitated) knowing you did the best for your family and heirs. That they will be able to celebrate your life or mourn your departure without the legal and financial hassles if you have planned.

Can you imagine the state deciding who should care for your children?
Can you imagine your family trying to scrap together money to keep the place they've called home? Can you imagine your business being sold off, leaving your family without income?

One aspect of Estate Planning is to allow you to take advantage of gift and trust laws so that you may be able to pass on more of your assets tax-free to your family and heirs. You aren't cheating the government; you're cheating your loved ones if you don't plan!

Another aspect of Estate Planning is to give control to someone you trust if you should become incapacitated.

As of this year, 2000, the Estate tax-exemption level is currently $675,000; however, this is said to be increasing yearly.

Why do Estate Planning?
~~ To distribute your assets ~~ To eliminate or reduce federal estate tax ~~ To avoid unnecessary high costs in legal fees and taxes to your heirs
~~ To pass on tax-free the maximum allowed assets (these figures seem to be changing yearly) ~~ To make sure things get handled the way YOU want them to be handled

What is taxable?
Many of the items that are taxable can include: Life Insurance, IRA and other Retirement benefits, Investments, Bank Accounts, Personal Property, Collectibles, your business, your home, and other real estate.

What do I need?
Some of the things you will want to look into are: ~~ Durable Powers of Attorney – this document transfers authority to another TRUSTED person to manage your finances.
~~ Health Care Powers of Attorney – this document gives someone legal authority to act on your behalf with regard to your health care.
~~ Living Will – this document will provide instructions as to the type of medical treatment that you prefer. ~~ Will – a document in which you can name an executor to oversee the settlement of your estate, outline what and how you want your assets and property distributed, and name a guardian to care for your children. However, after much research, I urge you to look into a REVOCABLE LIVING TRUST with Power of Attorney. Unlike having a will or no will, you skip probate, it's more flexible, you have maximum control, and you maintain privacy.

Estate Planning can cover, but not limited to, wills, trusts, insurance, estate taxes, gifts, gift taxes, and income.

You will need to form a team of reliable, dependable, and competent people in the following areas: ~~ Estate Planning Attorney ~~ Life Insurance Underwriter ~~ CPA
~~ Development Officer
~~ Financial Planner
~~ Captain-This is YOU. You are the Captain of the team; it's what YOU want to be done, your wishes. Your team is there to help you make the best choices for your life and your families.

TIP: Your parent's plan may affect your plan! If you don't know what they have planned, then discussing this with them might be the most difficult thing you'll have to do in estate planning. Many older parents downright refuse to talk to their children about such matters. Talking of such things can conjure up in their minds that you're after their money, that it's none of your business, you'll find out when we're gone. Speak to them calmly and clearly and let them know what YOU are trying to do, that you are taking control of YOUR finances, that you are getting all your ducks in a row and how THEIR ducks might affect yours. Share your plan with them and show them what you are trying to accomplish. Hopefully if they have a plan, they will share with you, and if they don'' have a plan, maybe they will learn something from you and get one of their own.

RELOCATION TIP: Property transfer laws differ from state to state. Review your estate plan when you move or retire to a different location.

Birth, death, marriage, divorce, inheritance, purchase or sale of assets are many reasons you should review your plan when you have these or other lifestyle changes. If you don't have any changes, a review of every three to five years is advisable.

Smiles, not Piles,
The Organizing Wizard, Janet L. Hall, is a Professional Organizer, Speaker, and Author. She is the owner of OverHall Consulting, and Organizing By Phone. Subscribe to her FREE organizing newsletter at http://www.overhall.com/newsletter.htm or visit her web site at http://www.overhall.com

Copyright © 2000 by OverHall Consulting P.O. Box 263, Port Republic, MD 20676 All Rights Reserved. Permission is granted to reproduce, copy, or distribute so long as article is kept intact, this copyright notice and full information about contacting the author is attached.

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