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Estate Planning When You're Young, Healthy and Childless

You can put off most estate planning-but not all-til later.

What are you doing reading about estate planning? You're supposed to out dancing until dawn. But you might as well keep reading; this won't take long.At your age, there's not much need to put a lot of energy into estate planning. Unless your lifestyle is unusually risky or you have a serious illness, you're very unlikely to die for a long, long time. Still, there are just a few estate planning matters it wouldn't hurt to think about.

Estate Planning for Unmarried Partners

Without the right estate planning, your partner could be left out in the cold.

If you've got a life partner but no marriage (or civil union or domestic partnership) certificate, estate planning is a must. Without it, neither of you will inherit from each other-and neither of you will have a say in the other's end-of-life medical care.

Don't Jeopardize a Beneficiary's Eligibility for Government Benefits

If you want to steer money to a beneficiary with special needs, be very careful. Anyone who receives more than a small cash gift will lose important government assistance-for example, Medicaid coverage that's crucial for a beneficiary who will never have a job that offers health insurance. Under current law in most states, you cannot receive Supplemental Security Income or Medicaid if you have more than $2,000 in "countable" assets (not all assets are counted for purposes of eligibility).

So you've been named Executor....

If you find yourself named in a will as the executor of someone's estate, your new role may feel overwhelming. After all, being an executor is something that most of us do only once or twice in a lifetime, and of course there's a learning curve before we're really comfortable with the process. The world of probate courts, lawyers, wills, and legal documents is unfamiliar and can be intimidating.

What Happens if You Die Without A Will?

If you die intestate (without a will), your state's laws of descent and distribution will determine who receives your property by default. These laws vary from state to state, but typically the distribution would be to your spouse and children, or if none, to other family members. A state's plan often reflects the legislature's guess as to how most people would dispose of their estates and builds in protections for certain beneficiaries, particularly minor children. That plan may or may not reflect your actual wishes, and some of the built-in protections may not be necessary in a harmonious family setting. A will allows you to alter the state's default plan to suit your personal preferences. It also permits you to exercise control over a myriad of personal decisions that broad and general state default provisions cannot address.

What is estate planning anyway?

Estate planning is the process by which an individual or family arranges the transfer of assets in anticipation of death. An estate plan aims to preserve the maximum amount of wealth possible for the intended beneficiaries and flexibility for the individual prior to death. A major concern for drafters of estate plans is federal and state tax law.

Moving to a New State? Take a Look at Your Estate Plan

If you move, should you throw out your estate planning documents?

If you move to another state, do you need to throw out your estate planning documents-your will, trust, living will (advance directive), and powers of attorney? A lot of effort probably went into the preparation of those documents (and a lot of money, if you hired a lawyer to draft them). You probably don't want to start over from scratch.

How to protect beneficiaries from themselves.

Billionaire Warren Buffett was famously quoted as saying that when it came to leaving your children money, the sweet spot is "enough money so that they would feel they could do anything, but not so much that they could do nothing."Few of us need to worry about leaving our kids so much that they could comfortably choose to do nothing. But many middle-class parents do worry that certain of their children (or grandchildren) might squander an inheritance on drugs or gambling, make bad financial decisions, or be manipulated by a spouse. Some decide to cut out these problem children entirely, fearing that an inheritance would only make things worse.But there are many options that fall between the two extremes of simply leaving money with no strings attached and leaving nothing. If you are concerned that any inheritance you leave your adult offspring could be quickly wasted, here are some steps you can take.

Per Stirpes or Per Capita?

If you name more than one beneficiary-for example, you name your two children-then you may be asked to specify whether you want them to inherit "per stirpes" or "per capita."Say what? First of all, know that It won't make a difference unless a beneficiary dies before you do and you don't update your beneficiary designations.It's easiest to understand these terms by looking at an example. Let's say you name your spouse as primary beneficiary and your two daughters as alternates. Both daughters have children of their own. Now let's say that by the time you die, both your spouse and one of your daughters have died. Your daughter left three children.

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