New Year's resolutions should include estate planning
With 2009 just around the corner, many people may be making New Year's resolutions such as eating healthy, exercising or learning a new skill.
One resolution these individuals might want to make is to develop an estate plan or update an existing one, said Sissy Osteen, Oklahoma State University Cooperative Extension resource management specialist.
"An estate plan is essential for anyone over the age of 18. Because regulations governing estate plans routinely change, it's important to keep current with those changes," Osteen said. "It's always a good idea to consult professionals to help you develop the initial arrangement or review the one you already have. Make sure the attorney is one who specializes in estate planning. You also may need to contact a certified public accountant and a financial advisor."
Topics that should be discussed with your financial professionals include making a will, charitable contributions, how to transfer wealth to reduce estate taxes, establishing a guardian for minor children, setting up a trust to manage money for minor children, durable power of attorney and health-care directive (should you become incapacitated) and settling your estate. Another idea to consider is setting up a joint checking account with one of your children or a trusted friend so bills could be paid should you become unable to do so.
Making gifts of money, land or other valuables is one way to reduce the size of your taxable estate. Osteen said individuals may gift up to $12,000 per year to anyone and the giver will not have to pay tax on the gift.
"For example, you and your spouse each can give $12,000 to each child, for a total of $24,000. If a child is married, you could give $24,000 to the spouse as well," she said. "In addition, a gift could be given to each grandchild for $24,000."
However, Osteen said this situation does not occur for most people.
It is a good idea to make note of what you want to do with other valuable or sentimental items such as jewelry, furniture or family heirlooms. Discuss your estate plan with your spouse, children or parents. This will help avoid any surprises when they are emotionally distraught due to your death. It also helps them understand the reasons behind the details in your will or trust document. Leave a letter of instruction for how you want things to occur. It might be the only way you can ensure your wishes are granted.
"Every adult age 18 and older should have a will, durable power of attorney and a health-care directive," Osteen said. "Death and disability are no respecters of age."
For more information on estate planning, contact your local Cooperative Extension Service office.