ESTATE PLANNING BASICS
A will is a legal document that directs how a person's estate and assets are to be managed and distributed after his or her death. It will control the distribution of assets such as cash, securities, and property. A will allows you to:
- Select an executor to direct the distribution of your property, however you wish;
- Make arrangements for care of children and/or special-needs family members;
- Devise an estate plan that may include support for your favorite charities or organizations.
Power of Attorney
A power of attorney is a legal document that allows another person to act on your behalf. Granting someone your power of attorney allows them to handle your affairs, such as writing checks, borrowing money, filing tax returns, exercising stockholder rights, etc. Power of attorney may be drafted to take effect immediately or in the future, should you become mentally incapacitated.
Estate Planning Tip
Make sure your power of attorney is durable. In common law, power of attorney becomes ineffective
if the grantor dies or becomes incapacitated. To create a durable power of attorney, you must specifically state that the power of attorney will continue to be effective even in the event that the grantor becomes incapacitated. This will ensure that it is valid and enforceable.
Beneficiaries are handled differently in conjunction with different assets. For example, to update the beneficiary of a certain asset in your will, simply update your will and provide your attorney with a new copy. Wills do not direct the distribution of IRA or 401K accounts; therefore, you must contact the administrator of the IRA, retirement plan, or life insurance company to change your beneficiary. They may be changed at any time.
U.S. Figure Skating does not provide tax consultation. Please refer all questions to your tax preparer.