Eight Essential Elements of Estate Planning

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More than half of all American adults do not have a will. Should tragedy strike, chas v’shalom, without one, many problems could potentially arise. Estate Planning is essential to save families from unwanted outcomes. Even without major assets, it is important to have these plans in place.

If there is no will when someone passes away, state law will determine who gets their assets. If a person is single and childless, the estate may go to the parents and siblings. If a person is married, their assets may all go to their spouse, or be split between the spouse and the children.  

Once a plan is in place, make sure the heirs know how and where to access the documents. Locking them away in a safe-deposit box means they may not be able to get to them easily.  

Below are nine essential elements to keep in mind. 

 

Create a Halachic Will  

This is in addition to a regular will. Be in touch with your rabbi to discuss all it entails. 

 

Guardianship for Minors   

Who will raise the children if something happens to both parents? It is also important to know how to handle life insurance payouts and money left to the children. The best option is to have the money placed in a trust for the children, versus leaving it to another adult.

 

A Will 

A will determines where assets outside of a trust will be distributed. This could include home, car, bank accounts, or personal possessions.
 

Executor 

This is the person who will carry out the deceased’s wishes.

 

Living Trust 

A living trust both allows a person to pass on assets without going through the public probate process and also allows someone else to manage affairs should they become incapacitated.  

 

Financial Power of Attorney 

This allows someone to manage a person’s financial affair.  

 

 

Beneficiaries 

Retirement accounts, pensions, life insurance, and brokerage accounts are passed through beneficiary designations, not a will.

 

Tax Planning 

If someone is wealthy enough to face federal and state estate taxes, be sure a professional can handle those plans. Even if they are less wealthy, their heirs will have to file their income tax returns, so make sure the heirs know where to find the relevant information.