Why Every American Needs a Will Now

While the nation still debates health care reform, a larger problem faces Americans. Seventy-eight percent of Americans own a home and fifty-five percent of Americans have minor children living at home, yet less than half of the country has even executed a will, much less the other documents that make up a complete estate plan. Some of us may need long-term health care and some of us might not but the only two certainties in this life are death and taxes. While we at Wild Felice & Pardo are unable to help you live forever, we are very good at limiting the amount of taxes your family will have to pay after you are gone.

Did you know that the estate tax threshold could be as low as $1 million in 2011 and the estate tax could be as high as 55%? $1 million seems like a lot of money but when you consider that the amount of life insurance you have is added to your estate immediately upon death, $1million can quickly sneak up on you. You work your whole life earning a wage. The government taxes that wage somewhere between 20 and 35 percent. Then, after you are gone the government takes an additional 45 to 55 percent of what you left behind. Almost 80 percent of what you earn in your lifetime will go directly to taxes unless you take the time to sit down with an attorney and draft your estate plan.

There are five components to a basic estate plan:

Will: A legal declaration by which a person, the testator, names one or more persons to manage his or her estate and provides for the transfer of his or her property at death.

Living Will: A written document that states a person’s wishes regarding life-support or other medical treatment in certain circumstances, usually when death is imminent

Power of Attorney: A written authorization to an agent to perform specified acts on behalf of his principal. This may be granted as either a general or a limited power.

Health care surrogate: An adult who is appointed to make healthcare decisions for you when you become unable to make them for yourself.

HIPAA designation: A written document that allows certain designated individuals to have access to your medical records.

In addition, there are also multiple trusts and other products for further control and estate tax reduction. If you have a spouse, a child, own a home, or want to leave behind a legacy of any kind, you need to talk to an attorney about getting your will and other estate planning documents in order. It is crucially important that you not put this off any longer. None of us can control how much time we have left but we can control how are loved ones are cared for when that time comes.