Are you one of those people who think estate planning is something you’ll think about after age 50 or 60? If you are, let’s consider a few points to ponder.
– If you were in a serious accident and were unable to make medical decisions for yourself, who would be authorized to make those decisions for you?
– If you and your spouse died in an accident, who would take care of your minor children, aging parents and/or other dependents?
– If you and your spouse died in an accident, would your minor children and other dependents be financially supported?
– If you and your spouse died in an accident, what would happen to your farm or business?
– After your unexpected death, would your church, school or other charities receive intended funds from your estate?
– Would estate taxes, probate fees and other legal costs be held to a minimum?
The basic objectives of an estate plan for most people are to distribute the estate per your wishes and to keep the costs of doing so to a minimum. Given these objectives, the estate plan should indicate to whom you want to leave your estate, how much they are to receive and when they will acquire it. If an estate plan does not answer the basic questions of "who," "how much" and "when," it is not doing what is intended to do.
Looking at the six questions above, consider your own situation. If you and your spouse are a young couple with a farm and home mortgage, two minor children and a life insurance policy, have you planned enough? If you and your spouse do not have a will, the answer is no. A will is a legal expression of your desired disposition of property. In addition to the will, other legal instruments available for your use in estate planning are trusts, gifts, contracts and insurance. These tools are available and may be useful depending on your individual situation.
If you die without a will or have not otherwise disposed of your property through contracts, trusts, gifts, spending it all, etc., the State of Alabama will distribute your assets for you under an intestate plan prescribed by state law.
If you are injured and unable to make decisions for yourself, you should complete an Advance Directive for Health Care which designates who is authorized to make medical decisions for you in an emergency.
If you are 25 or 65, all of us need some estate planning. Identify and choose trusted advisors for your personal situation. You may need an attorney, accountant/CPA, insurance representative, banker, certified financial advisor and others such as a long-term care advisor to help you and your spouse make good decisions.
These may be the hardest decisions of all, planning for life after your death. But that time will come to all of us, sometimes when we least expect it. Plan now for the unexpected. Your family will thank you for your foresight. n
Note: This article is based on ACES Timely Information Sheet – DAERS 07-6, that can be found on the Alabama Cooperative Extension System website at www.aces.edu.
For more information about farm management and financial analysis, please contact your County Extension Coordinator or an Extension Specialist: North Alabama: Holt Hardin, 256-574-2143 or Robert Page, 256-528-7133; Central Alabama: Jamie Yeager, 334-624-4016; Southwest Alabama: Steve Brown, 251-867-7760.