A Seven-Step Plan for Your Future
Posted by Steve Martindale at 5:56 AM | Permalink | 1 Comment
Ready or not, this is National Estate Planning Awareness Week, so it's a great time to visit PETA's new gift-planning website. Studies show that more than half of Americans do not have an adequate plan in place for after they're gone. If something happens to them, odds are that their wishes will not be fulfilled as they would have liked. Isn't it important that your money and other assets speak for your beliefs—that they represent your core values regarding helping animals? By developing a plan to make that happen, you can achieve a sense of inner peace and accomplishment right now, in just seven simple steps:
Step 1: Inventory assets. This list includes everything of monetary and/or emotional value. Bank accounts, investment accounts, IRAs, life insurance, houses, cars, art and jewelry collections, and so on. This task may sound daunting, but for many people, it's actually very simple. You need not detail everything in your house, except for the items that you want to leave to a particular person or cause. For all other items, you can simply write, "All other contents of my apartment [or house]." It will help in what follows to write down, for each asset, what the current paperwork provides for—IRAs and life insurance already have assigned beneficiaries, for example.
Step 2: Define goals. What is it that you want to accomplish? There may be people you want or need to provide income for. Perhaps you need income for yourself until you pass on. What nonprofit groups do you want to support? This may be your chance to make the biggest difference ever for those organizations because the resources available for helping them—part or all of your accumulated savings—are usually far greater than what you can afford to contribute during your lifetime.
Step 3: Construct your legacy. This is where the nitty meets the gritty: how to make your assets work to accomplish your goals. There are many ways to get from assets to goals—wills, trusts, beneficiary assignments, and charitable gift annuities are some of the most popular. Click here for a nifty way to figure out which ones might work best for your situation.
To leave the most for animals, it's important to consider how taxes affect your possible plans. For example, when IRAs are cashed out, the recipients owe income taxes on what they inherit and estate taxes can be an issue. But no taxes are taken out if PETA or other 501(c)(3) charities are the direct beneficiaries. Many other assets, like investment or bank accounts or houses, can be left to the people you want to provide for without any income taxes. So efficient planning can make a big difference in achieving your goals.
Step 4: Plan for animal companions. I'm counting this as a separate step because they deserve special attention. If you have animal companions, please take the time to make sure that they will be taken care of if you become incapacitated. There are two parts to an adequate plan: immediate care and lifelong guardianship. It's important that people know that you have animals and that they have access to them and instructions for special care if necessary. Otherwise, your beloved companions could face many lonely days if they are stuck in your house and you aren't coming back. Beyond the immediate response, plans should be in place to provide for continuing compassionate care. Click here for more information on how to get that set up.
Step 5: Complete your paperwork. You've already done the heavy lifting; now you just need to get your documents in order and sign on the dotted lines. We strongly recommend that you seek qualified counsel for this part, such as an estate attorney working with your financial advisers if your situation is complex. Even if you use a packaged program for drafting documents, please have a lawyer look it over to make sure that it will actually accomplish your goals. If you've done your homework on the above steps, you'll minimize the legal time and expenses. Then, kick back and congratulate yourself for a major accomplishment: You will be saving animals for generations to come!
Step 6: Monitor and revise. Times change, of course. Tax laws come and go, people and animals come and go, and assets accumulate in different ways. Marriages, divorces, births, deaths, and moves to a different state—all these are good reasons to review your paperwork and make sure that it adequately addresses your goals for all your assets. Many people find it useful to do a quick review every year, just to make sure.
Step 7: Let us know if PETA is in your plans! A significant portion of PETA's lifesaving work to help animals is funded by bequests, making this is an important source of revenue for the organization. If you do make the commitment to help fund PETA's progress for animals in the future, please consider joining the Augustus Club. It's a great way to keep in touch with PETA and other like-minded people.
Posted to Money | Posted to Tags: estate planning, investment, legacies, planned giving, Steve Martindale