By Xavier Brenner During this festive time of year, dwelling on estate planning may seem like a bit of a downer. Yet the end of the year is as good as time as any to take stock of your personal finances and also make sure you have done some proper estate planning. Having your affairs in order will lift a huge burden off your family that would otherwise face a big emotional and financial toll in probate court should something happen to you.
Yes, nobody relishes thinking about the day when they will no longer be around. But with a little effort and foresight, you can give your family the ultimate gift: a piece of mind. Here's a quick checklist of estate planning essentials:
These legal documents spell out clearly how you'd like to distribute your estate, the total wealth of a person less debts and other liabilities, after you shuffle off this mortal coil. You can also appoint a legal guardian for any minor children left behind. Without a proper and updated will, you run the risk of having your assets divvied up by the probate court in your state. This is known as dying intestate and the settlement process can be long and expensive. Consider this: When rock legend Jimi Hendrix died in 1970, the battle over his estate raged on for more than 30 years.
Some people prefer setting up a living trust, a legal document that places your assets (your bank accounts, investment portfolio, your home and so on) into the trust that is administered during your lifetime. You can name yourself the trustee or appoint someone else should you become incapacitated. When you die, the benefits are transferred to your beneficiaries.