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Estate Plan: Medical Power Of Attorney & Private Foundation
Setting up a medical power of attorney along with a living will is an extremely important step in the estate planning process. A medical power of attorney or a living will describes the type of health procedures that can or cannot be done on us, should it be needed. This is based on our desire. Everybody has different desires, but many utilize the medical power of attorney to eliminate unnecessary prolonged life. Essentially stating, legally, whether we would like to be resuscitated if we end up in a non-responsive state. Would you want to be artificially kept alive for an extended period of time if you were in a vegetative state? The answer may vary, depending on the individual. The important thing is that the medical power of attorney and living well provide the legal instructions that describe your desires.
The need for both living wills and the medical power of attorney was made famous by the Terri Schiavo case. If Terri Schiavo would have had a medical power of attorney things may have been quite a bit easier for her family. What she and her case can teach us all is the importance of proper estate planning, at any stage. We never know when our moment will come, so planning early is the wisest step we can take. Accidents happen all the time. If something were to happen to you, would your family be protected? Would your desires be met? Would your legacy be remembered? If the the answer is no, you probably haven't done the necessary estate planning. Proper estate planning may include setting up a living will, medical power of attorney, a living trust, proper life insurance, and much more. Meeting with a qualified estate planning advisor can help you and your family meet your estate planning needs. Make sure to include your family in the process. All too often, families are unaware of their loved ones wishes. This is especially true when it comes to a living will and medical power of attorney. This can be a sensitive subject, so your desires and wishes should be described and discussed with your family during the estate planning process.
Another common part of the estate planning process often involves the private foundation. Private family foundations are typically set up to ensure a family's legacy. But, it often comes with benefits such as controlled gifting and the reduction of taxes. In the past Private foundations were often thought of as an estate planning tool for the ultra rich, but times have changed. With as little as $25,000 annual contributions you can set up a private foundation on your behalf. It is important to consider, however, that with estates with less than the $3 million range, a private foundation may be cost prohibitive.
What we're finding with the baby for a generation, is that they like to be involved in numerous charitable causes. This is evident through their volunteer work, as well as their economic contributions. The private foundation allows these individuals to continue their good will towards the areas that matter most to them. This may involve anything from medical research, church involvement, or the support of other charities.
The beauty of the private foundation is that it allows you to bequeath based on your beliefs. You may want to leave a particular legacy behind, allowing you to be remembered in a certain way. All of this is possible while making perfect economic sense. You could set up a stand by foundation, providing you with payments that can not be outlived. Or you may want to set up a flow through foundation. The flow through private foundation allows you to take property that has appreciated, convert it to cash, and then redistributed to charities, without endowment. This can be particularly valuable when sitting on rather large capital gains taxes. Also, private foundations offer flexibility that other estate planning approaches, like a living trust, cannot match.
The private foundation is just one of the many tools utilized by the wealthy to ensure their legacy. The tax benefits are obvious, but for many the flexibility and control are more desirable than traditional means of giving. Due to the complexity of setting up a proper private foundation it is recommended that you meet with a qualified estate planner before proceeding.
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