This article answers some of the most frequently asked estate planning questions, including how to leave stock in your will, is the surviving parent required to honor the deceased parent's will, should you put estate planning documents in a safe deposit box, and why should you leave last wishes instructions. It also addresses common estate planning concerns such as granting power of attorney and putting property in a living trust. Browse the topics below to learn about some of the most important aspects of estate planning.
How to Leave Stock in Your Will
If you own stocks and want to include specific shares of stock in your estate plan, there are several issues to consider. The first is whether you want the stock to pass through probate or want to take steps to ensure it transfers to your beneficiaries through a form of
non-probate transfer.If you are planning to leave your stock to a charitable organization, there are several tax issues that are important to understand. The tax treatment of inherited stocks will also be a concern to your children or other heirs, so you should discuss this with your tax adviser.
To bequeath shares of stock in your will, there is specific language that should be used. To view this form language and learn more about the issues related to leaving stock in your will, see how to
leave stock in your will.
Questions About Living Trusts
If you are planning your estate, you may be considering making a living trust to avoid probate. If you have never had a trust before, you may have concerns about what happens to the property you put in the living trust. Many people do not use probate avoidance techniques such as living trusts because they believe they will lose control of their property. This is just one of the common misconceptions about living trusts. To get the facts about this popular estate planning method and learn what actually happens when you fund a living trust, see
living trust property.
What to Store in a Safe Deposit Box
Although people generally think of a bank safe deposit box as a secure place to store important legal documents such as a will or living trust, it is not a good place to keep your original estate planning documents. If you put your original estate planning documents in a safe deposit box, it may be impossible for your executor to access and could result in your estate being administered as if you died without making an estate plan. However, there are several items you should consider storing in a safe deposit box. For tips on where to keep your original estate planning documents and what you should store in a safe deposit box, see
safe deposit box.
Questions About Powers of Attorney
Questions about making a power of attorney are among the most common estate planning questions. The person you name as your agent under a power of attorney has the authority to take many actions regarding your property. While this document is designed to protect you in the event you are unable to make decisions for yourself, it can be very damaging in the wrong hands. Be very cautious about selecting the person you will name as your agent. To learn about the risks involved in granting a power of attorney and how to protect yourself, see
power of attorney risks. Before you make a power of attorney as part of your estate plan, it is important to understand why you need a power of attorney and decide the limits you want to place on your agentís authority. For a list of actions an agent can typically take under a power of attorney document, see
agent powers under a POA.Finally, it is important to understand that a will is not a replacement for a power of attorney. These are two very different types of estate planning documents. For an overview, see
questions about power of attorney.
Should You Write Your Last Wishes?
It may not be obvious why you should leave instructions for your survivors about your last wishes for final arrangements, such as funeral, burial, and cremation. However, you may be surprised at the problems and even disputes that can result from failure to deal with this aspect of your estate plan. For a list of reasons you should write your last wishes instructions or complete a memorial preferences planner, see
why leave last wishes.If you are married or have a partner, ask yourself whether you have a clear understanding of the type of funeral service and other final arrangements he or she wants. If not, try to engage your spouse or partner in a conversation to learn about his or her memorial preferences. Ideally, you should both complete a
Last Wishes Form to put these preferences in writing.
Protecting Your Child's Inheritance
If you have children and want them to receive an inheritance, you also need to consider the inheritance rights of your spouse or partner. If your spouse or partner survives you, the estate planning documents he or she makes could determine what your children inherit. Many adult children have been disinherited by their surviving parent, even though their other parent wanted them to receive an inheritance. If you want to provide financial security for your children or pass on a family legacy, see deceased parents will for answers on how to protect their inheritance.
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