Leaving Money to Family and Charity

During your working years, you are often focused on making money to provide for your family, save for retirement, build a nest egg and invest for your future. The assets you and your spouse accumulate may become significant, especially over time.

Carefully planning for what should happen to your assets upon death can be a lasting gift to your family. Documenting your wishes through the preparation of wills, trusts and powers of attorney is important. Sharing this information with your heirs can help keep the peace among siblings and blended families.

You and your spouse can get started on the estate planning process by discussing your goals and objectives, together. What would happen if you die when your children are still young? Are your spouse and children experienced with handling money or will they need help? Knowing your children’s personalities, would it be detrimental to leave them a large sum of money all at one time?

Some people may want to assist their children and grandchildren financially not just upon death, but over the course of their lives. Annual or occasional gifts, perhaps around the holidays, give many people great pleasure. Each family member may have different needs, such as help buying a reliable car, paying off student loans or just making ends meet.

Leaving money to charities whose work is near and dear to your heart can be a part of your plan. Letting your family know in advance how important this is to you can help smooth over any disappointment associated with not receiving that part of your estate. Getting your children involved in working with charitable causes, and helping them understand the importance of giving early in life, may help them better understand your decision.

Recognizing that there may be a number of people who become involved in executing your estate plan is important. There is a significant amount of work and responsibility involved when a loved one passes away. The person you name as personal representative of your will is responsible for gathering all of your assets, paying any remaining debts and distributing the balance of your estate per your wishes.

You may wish to set up a trust to avoid probate, ensure privacy or distribute assets over time rather than immediately. Your trustee will be responsible for the proper management of trust assets and seeing that funds are distributed according to the trust provisions.

During your lifetime, a general power of attorney appoints an agent or “attorney in fact” who can manage all your financial affairs if you are disabled or unable to take care of business as usual. Equally important is who you name as the agent for your healthcare power of attorney and living will. This person will step into your shoes and work with your doctors to make medical decisions on your behalf.

When choosing a guardian for your minor children, agreement between you and your spouse is critical and can be a significant area of discussion. It’s not uncommon for each parent to want their own parents and/or siblings to fill this role.

You may want to appoint different people to act as your children’s physical guardian and financial manager. This is often a practical solution, and can help achieve the best results.

Planning for the care of your family and finances after you are gone takes time and thoughtfulness. Your decisions may change over time. The value of your estate will change. Relationships with family members may change. As a result, your estate plan will need updating from time to time.

Estate planning is easy to put off because you may not have the perfect answers for all your decisions. Getting an imperfect plan in place is better than none and is a wonderful gift to your family.

This commentary originally appeared October 31 on TheCasperStarTribune.com

The opinions expressed by featured authors are their own and may not accurately reflect those of the BAM ALLIANCE. This article is for general information only and is not intended to serve as specific financial, accounting or tax advice.

© 2015, The BAM ALLIANCE

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Connie Brezik, CPA/PFS, CFP®

As a wealth advisor at Buckingham Strategic Wealth, Connie works with clients to form a comprehensive financial plan tailored to their individual circumstances, one that includes portfolio management, tax strategies, wealth transfer considerations, retirement analysis and education planning. She welcomes the chance to help clients work through difficult situations, finding solutions that they may not have thought of and guidance about what to do if their plans don't work out as anticipated.

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