Estate planning entails preparing your affairs for the future, including death and other life events. While older adults might give more thought to estate planning, it is an essential tool at any age.
An executor (or personal representative) is a person or entity you choose to carry out your last wishes outlined in your will. Your executor should be someone you trust is responsible enough to manage your estate after you pass away. Choosing an executor is a big decision when it comes to estate planning. So, what should you know about an executor? What should you consider before naming an executor? Here are answers to three common questions about executors.
A power of attorney is a legal agreement that gives a person (“attorney-in-fact” or “agent”) the ability to act on behalf of another person (“principal”). A common question asked about a power of attorney is under what circumstances one be overridden. A power of attorney can be overridden. However, the “who” and “how” depends on whether the principal is of sound mind. First and foremost, the principal can override a power of attorney at any time as long as they are of sound mind. The term “sound mind” refers to the state of mind and memory a person has at the time in question. So, as principal, you could override your power of attorney if you have sufficient mental capacity to understand what you are doing.
A power of attorney is a powerful planning document that enables you (the principal) to give another person (the agent or attorney-in-fact) the power to act for you while you are alive. Because powers of attorney are often prepared in the context of estate planning, many believe they give their agents the power to continue acting after their death. Although every state’s laws and forms vary, most power of attorney forms specify that the agency relationship created by a power of attorney ends upon a person’s death.
Following the death of a family member, you may find yourself needing to sort through many possessions accumulated over the deceased’s lifetime. An estate sale is one way to distribute those items that you do not want or need quickly and efficiently. While selling someone’s furniture, jewelry, artwork, antiques, and other belongings yourself can mean a great deal of time and effort on your part, there are companies that help families sell items. An estate sale company will do all the work in exchange for a percentage of the proceeds—typically anywhere between 25% and 50%. The company usually handles organizing the inventory, staging the house, appraising the value of items and setting prices, promoting the sale to the public, and hiring workers to run the sale. You may need to pay a separate fee to the liquidator for cleaning up following the sale, including donating or disposing of any goods that do not sell. Keep the following in mind when getting ready for an estate sale:
Although inflation is generally nothing to be pleased about, the IRS recently announced inflation-adjusted changes to the annual gift tax annual and estate tax exclusions for 2023.
Required Minimum Distributions (RMDs) are the minimum amounts a retirement plan account owner must take out each year.
If you are considering preparing a will, this is a great first step in planning for the future.
After losing a loved one, consider the best way to honor them and their life. Sometimes, a traditional funeral is not the best fit. Today, there are many alternatives to a traditional funeral service and burial.
There are many misconceptions about estate planning, and any one of them can result in costly mistakes. Understanding who needs an estate plan and what it should cover is key to creating a plan that is right for you.
