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Taking the time to create the right estate plan

Many baby-boomers in Minnesota have spent years, even decades, planning for their retirement. Unfortunately, the same individuals often have not spent nearly the same amount of time and care engaging in estate planning, which will determine the distribution of assets that will occur upon their death.

The reasons for the delay are understandable. For example, some individuals simply may not like the thought of dealing with their own death, as it can be an uncomfortable subject to approach. Others may think they do not need to worry about estate planning, particularly because the federal estate tax exemptions run over $5 million dollars, which may be significantly more money than a person's estate is worth. Indeed, only approximately 1 percent of estates must pay federal estate tax.

In reality, there are many more reasons why it is important for individuals to have a well-designed estate plan. For example, a proper estate plan can minimize the likelihood of conflicts between surviving family members, and it can reduce the amount of court costs that might otherwise occur.

Having a well-designed estate plan not only means taking the time to think about how a person wants his or her assets distributed, it also means complying with the required formalities to put those wishes into effect. Accordingly, while it might seem easy to simply print a standard power of attorney form or will off the Internet and fill it out, those forms may not be valid in a particular State. Moreover, the form might not accomplish the same legal effect as the person wants to accomplish, and therefore it can defeat the entire purpose of estate planning. By taking the proper steps on the front end, individuals can ensure their wishes are complied with, and their estate is handled in the best possible manner.

Source: Fox Business, "Estate planning mistakes every boomer should avoid," Casey Dowd, Aug. 21, 2014

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