Estate Planning: What will your legacy be?
You don’t have to be a millionaire to set up an estate plan. Have you thought about passing down a family heirloom to one of your children? Maybe you’ve considered leaving money to a charity that benefits public arts funding. When you’ve spent your life acquiring assets and building wealth through hard work, it’s only natural to want some control over what happens to them after you’re gone. The best way do this is to have a sound estate plan‡.
As you form your estate plan, keep in mind several key ideas.
Pick your heirs
Whether you want to pay for your grandchildren’s college education or give a ring that’s been in your family for generations to your oldest daughter, decide who you want to provide for and how.
If you have specific ideas about how you want your assets to be used when you’re gone, make sure that those ideas are clear in your estate plan. You may want to start a family foundation that supports children’s literacy or structure a trust‡ that holds money you’ve left for your children until they reach a certain age. Whatever special objectives you have, clearly outline them in your estate plan to ensure they’re accomplished.
Protect your children
If you have young children, it’s important to select a guardian to care for them and include this in your will. This may seem like an impossible task, but only you should decide who is best suited for the job. Be sure to talk to them about it before you put them in your will. Having a conversation with them ahead of time will prevent surprises and ensure they are up to the responsibility. Once they agree, make sure it’s documented. If you name a guardian in your will, the probate court‡ will be more likely to honor your wishes. If you don’t list a guardian in your will, the court will select one without guidance.
Prevent legal hiccups
Generally, assets owned by one person are subject to probate after they have passed. Probate is a name for the legal process conducted to determine the authenticity of a will and to distribute the assets of an estate. Probate involves legal costs and causes delays in the distribution process.
To avoid probate and minimize taxes on your assets, you can place part or all of them in a trust. One option is a “self declaration of trust,” where you are responsible for the assets while you are still alive (initial trustee) and a professional third party is responsible for distributing the assets after you are gone (successor trustee). Another option is to name the professional third-party as the trustee while you are still alive.
Many people tend to put off estate planning. But it is an important process for you to consider. It’s an opportunity to take control of future planning for yourself and your beneficiaries. It can be a difficult, but if successfully completed, this seemingly impossible task becomes an efficient and well-executed plan.
Content is for informational purposes only and should not be taken as legal advice. Please consult an attorney for assistance related to estate plans and your particular situation.
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Mr. Tjaden serves as executive vice president and chief fiduciary officer. He is responsible for supervising all fiduciary activities and staff for UMB, including offices in Kansas City, St. Louis, Denver, Phoenix and Salina, as well as the Trust Company in South Dakota. Mr. Tjaden oversees Personal Trust, Custody, Foundations, Trust Legal and Business Support Services within the Private Wealth Management division. He joined UMB in 1977. Mr. Tjaden earned a bachelor’s degree in business administration and political science from Kansas State University. He also earned a Juris Doctor and a master’s in business administration from the University of Kansas. Additionally, Mr. Tjaden is a Certified Trust and Financial Advisor and a member of the Estate Planning Society, the Johnson County Bar Association and the Kansas Bar Association.