What Parents Need to Know About Estate Planning | S$M (2024)

FAQs

What are the 3 main priorities you want to ensure with your estate plan? ›

A: The three main priorities of an estate plan are to ensure that your assets are distributed in the way you prefer, that someone else has the authority to make decisions on your behalf if you are unable to do so, and that your beneficiaries are clearly defined.

A will or trust should be one of the main components of every estate plan, even if you don't have substantial assets. Wills ensure property is distributed according to an individual's wishes (if drafted according to state laws). Some trusts help limit estate taxes or legal challenges.

Some of the most important reasons for having an estate plan boil down to two main functions: protecting your beneficiaries when you die and protecting yourself if you become incapacitated.

A comprehensive estate plan typically includes four estate planning documents. These documents include a financial power of attorney, an advance care directive, and a living trust or a last will. Here's what each of these documents accomplishes.

The five ethical considerations of competence, conflicts of interest, testamentary capacity, diligence, and continued obligation are extremely important in all estate planning endeavors. Ethical planning and decision making cannot be dismissed.

Estate planning involves creating a plan to indicate how your property and healthcare will be managed in the event of a disability, how your estate will be administered at death through a trust you create during your lifetime, or by probating a will where your property will go upon death and how to avoid death taxes if ...

Taxes are the common challenge most people think about when they create an estate plan, but there are additional factors you should be aware of, such as passing down your business and assigning a trustee to your trust.

The first step of estate planning is to list all of your assets and get a general idea of how much they are worth. While valuation is straightforward for most assets, it can be difficult with intellectual property like your music copyrights.

What is the difference between will and estate planning? ›

While a will is a single tool, an estate plan involves multiple tools. Some common inclusions are wills, powers of attorney, advance directives, trusts and more. Estate plans can involve both durable power of attorney for your finances and healthcare power of attorney for medical decisions if you're incapacitated.

1. An Estate Plan Protects Beneficiaries. If estate planning was once considered something that only high net worth individuals needed, that's changed. Nowadays many middle-class families need to plan for when something happens to a family's breadwinner (or breadwinners).

In an emergency, it's crucial to have a few essential legal estate documents readily accessible, such as a Last Will and Testament, Advance Healthcare Directive, Durable Power of Attorney (aka Financial Power of Attorney), and Living Will.

List three common goals of estate planning. Transferring property to particular persons consistent with transferor wishes, minimizing taxes, minimizing transaction costs associated with the transfer.

Financial security for your family is perhaps the most important objective of a well-devised estate plan. It ensures that your family has the funds it needs, there are no delays in transferring assets to them, and there is enough liquidity to pay settlement costs, taxes and debts.

Besides making sure your assets get to the people you choose, planning can help minimize income, gift and estate taxes, too. Without an estate plan, and specifically a will, the laws in your state will determine what happens to your possessions, and the courts will decide who gets custody of your children.