Knowing your personal net worth and what that means for your planning needs is vital to your peace of mind. It is important to keep a record of your personal net and update it annually or when a life change occurs. The definition of net worth (net assets) is your total assets minus your total liabilities. There is a tendency to overlook assets that you own or to underestimate your net worth and the importance of planning to ensure that our wishes are carried out. To help you calculate your net worth, please use the attached personal estate planning record.
Personal Estate Planning Record
How it helps:
Your record provides important personal information about you and your family that will be most helpful to your executor when it comes time to settle your estate.
Your record serves as the basis for creating an estate plan and providing for the future well-being of your family and the causes you care about most, for example Doylestown Hospital.
Your record also serves as a basis from which to determine what your estate taxes would be under various plans of distribution.
After you calculate your net assets it is time to ask yourself the following question: “Do I have a plan to distribute the assets I have worked hard to accumulate over the years?” Your estate plan is important regardless of your age. An estate plan not only lets you decide who gets what, what charities you would like to continue to support, and gives you mechanism for choosing a guardian for your minor children. It also allows you to set things up in a way that minimizes taxes and may prevent your estate from going through a lengthy probate process.
If your estate is worth more than the exemption amount for Federal estate taxes, the amount over that could be taxed at as much as 50%, plus state taxes. How much estate planning do you need?
Write a Will
Whether you own a home, a summer cottage, a Porsche 911, and a huge stock portfolio, or simply a car, a computer, and some household furnishings, if you want your property to go to the people and charities that you designate, a will is a must. Without one, the state will determine who your heirs are and how much of your property each one will receive, regardless of your wishes. The process can be stressful and expensive for your loved ones and will not yield your desired wishes. A will is also the only way to designate a custodian for your children.
Create a Durable Power of Attorney for Health Care
This document which you fill out and give to your doctors, lets you name someone to make health care decisions for you if you're unable to, such as whether to use life-sustaining measures to prolong your life if you are terminally ill or unconscious and unable to speak for yourself.
Create a Durable Power of Attorney
If you're physically or mentally unable to take care of your financial matters and make financial decisions on your own behalf, you'll need someone who knows you well and whom you trust to do that for you. The way to do this is through a Durable Power of Attorney.
Establishing a trust allows you to stipulate how your heirs can spend their inheritance and when they'll receive the money or property you've left to them. You can also designate a charity such as Doylestown Hospital to receive a portion of the assets.
Consider Giving Gifts While You're Alive
In 2007, you can give up to $12,000 (couples can give up to $24,000) a year to as many people as you choose without you or them incurring any taxes. You may also make gifts to the causes that are important to you and you will be able to see your generosity at work.
Set up a filing system that includes information on all of your assets and investments, insurance information, will, and other financial documents and make sure the person you named in your Durable Power of Attorney knows where these documents are kept.
Planning your estate will allow you to reflect your hopes, compassion and judgement. Even though you need the assistance of a legal counsel, the finished plan will be customized to meet your goals, both personal and philanthropic.
For more information, please contact the Director of Development
The information on this web site is not intended to be legal or tax advice. Please consult your tax advisor, lawyer or financial planner to verify a contemplated gift fits into your overall planning and circumstances.