Estate Planning for Mental Peace: A Guide
Estate planning is often considered a task that only wealthy people need to complete in order to distribute their wealth in the manner that they like. End of life planning seems quite morbid and many people put off this essential task.
Estate planning is a task that every person should complete. It’s not just essential to distribute your wealth, but is also useful during your life.
Why is estate planning important?
An estate plan is a collection of documents that state how your wealth is to be distributed. You also appoint a power of attorney, a person who is to make decisions for you, should you be incapacitated in any way.
If a person passes away without an estate plan or will, their wealth is distributed according to the laws of the country or state. Therefore, developing an estate plan as early as possible allows greater control over how your wealth is to be divided. It’s best to review this plan every year to make any changes.
Estate planning also makes things easier for your family. During their time of grief, they won’t have to focus their energy on getting a lawyer and ensuring the assets go to their rightful beneficiaries.
Choose a power of attorney carefully
A power of attorney is the person appointed to make financial decisions on your behalf. This can be useful if financial decisions have to be made when you’re out of the country or should you become mentally or physically incapacitated. The person chosen as your power of attorney can also make medical decisions on your behalf.
Since this is such an expansive role, it’s essential to choose a power of attorney wisely. Choose someone who understands what you want for your wealth once you have passed away and a person who can make the best decisions for you, should that time come.
The two main types of powers of attorney are continuing and non-continuing. Non-continuing power of attorney is valid when the donor can make decisions for themselves. Once they pass away or become mentally incapacitated, a power of attorney is invalid. Such power of attorney is given so that the person chosen can make financial decisions when the donor is out of the country. A continuing power of attorney is valid even after becoming mentally incompetent. A power of attorney has the power to pay your bills, apply for benefits (wherever possible), collect your pension, and much more.
Reduce probate and taxes
Probate is the process of validating any will. All estates have to go through probate. Some states charge a nominal fee, while others charge up to 1.5%.
If you have a spouse, jointly holding property sis the best strategy. Joint ownership of assets ensures they don’t go through probate. When one partner passes away, their share of the asset is given to the other one. You can also employ the services of a tax consultancy service that can help you with tax strategies.
Faber provides estate and trust planning in Edmonton, Alberta. We have over 20 years of experience in the industry. We also provide accounting services, tax planning, and other services. Our team works tirelessly to help clients.
Get in touch with our experts in Edmonton, Alberta today at 780-432-5262 and book an appointment.