Uncomfortable Estate Planning Lessons I've Learned In Deer Park
After seven years abroad, I returned with my family to our home state a year ago. I was excited to spend more time with my father. He was 84 years old and had been sick for a long time; he had survived renal cancer, but one of his kidneys had failed, and he had been on dialysis for five years. He was in a bad way.
My father's health began to deteriorate six months afterwards. He was diagnosed with early-onset dementia and began to reject dialysis. My sister and I attempted to assist him in every way we could, but he refused. My father was sent to the hospital after missing two dialysis sessions, which we were unaware of. We paid him a visit in the hospital, where he rejected treatment once again, necessitating hospice care. A week later, at 3 a.m., I received the news that my father had died.
In the middle of the chaos, I had to arrange for my father's estate. My father passed away without a power of attorney, which would have enabled my sister and me to seek medical care for him. He didn't leave a will or a trust stating his preferences regarding his assets at the end of his life. In his befuddlement, he had also ceased paying his life insurance payments, robbing his family of years of protection. My family had to suffer not just the pain of my father's death, but also the financial weight of his death.
Three Estate Planning Suggestions For Deer Park
People often profess a wish to relieve their children of their burdens, but few take all of the essential estate planning processes. I'd want to take a closer look at a couple of them.
I'm going to start with life insurance. Its major function has traditionally been to replace a person's salary in the case of a premature death. As a general guideline, a person's death benefit should be 10 times their current pay. If a person earns $100,000 per year, for example, he or she should obtain a million-dollar life insurance policy. This is particularly true if the policyholder has small children or college-bound children, as well as an outstanding mortgage. With the passage of time, you may find yourself as an empty-nester with a mortgage that is either paid off or almost paid off. Your standard life insurance requirements are most certainly in the rearview mirror. If you elect to keep your insurance, it's usually for a different reason: to cover end-of-life expenditures like burial and funeral charges. Small plans that cover last expenditures are inexpensive, particularly for persons in excellent health. Even individuals with sizable estates may want to carry some life insurance. Liquidating real estate or retirement savings to cover last expenses may be a time-consuming and difficult procedure.
Let's go on to wills. A will is a legal document that specifies the distribution of an estate. Only 46% of Americans have a will, which means that the majority of estates are resolved in probate court, which may take months or years to complete. It's also rather costly. An attorney's fee is sometimes expressed as a percentage of the Deer Park estate planning, which may be in the tens of thousands of dollars. The good news is that, even without a will, many assets may readily avoid probate. Both probate and wills are superseded by any transfer on death instructions or beneficiary designations. As a result, it's critical to maintain such designations up to date so that assets may be transferred without delay to their proper destination.
Is a strong desire, however, sufficient? Some people may find it beneficial to take one more step, which is to establish a trust — an organization whose main mission is to manage assets after your death. Trusts may be created for a variety of purposes, including tax savings, probate avoidance, and even improving Medicaid eligibility. But I'd want to concentrate on one of the most persuasive trust characteristics: the capacity to plan for eventualities in inheritance. You may not want your heirs to squander their money too rapidly. Perhaps some of the intended receivers are dealing with drug addiction, alcoholism, despair, or troubled relationships. Giving them money may do more damage than help, therefore a good trust will keep track of how and when funds are spent in certain cases. Contingencies, such as attaching inheritance to college accomplishment, job progress, or charity giving, may also be used to promote good conduct. Only your imagination and state law limit your contingencies.
Conclusion And Call To Action
Many individuals go to tremendous measures to maintain control over their possessions while they are alive, only to leave everything up to chance after they die. I've personally experienced the agony, worry, and suffering that a lack of preparedness can cause. Consider this: if anything were to happen to me today, how would I want my money to help people I care about? How could I make their life easier in the midst of such a trying time? More importantly, get assistance in putting those ideas into action!