1915 Tax Preparation Guidt Financial fire drill for American family By Judith G. Rhoades Copley New* Service • 7&S Imagine that your home is on (ire. Flames are everywhere, leaping through thick, black billowing smoke. Your spouse and children are frantical ly trying to make their way to safety. An overwhelming catastrophe is about to strike your family, but for- tunantely, you discussed such a possibility with them. You showed each of them where to go, what to do and how to react. The worst has happened. Yet, you, your spouse and your children are now all safe and unhurt. Now picture yourself disabled -- or dead. Have you taught your family how to cope? Do they know where to go, what to do and how to react? According to Stephan Leimberg, pro fessor of taxation and estate planning at the American College, every family -- every year--should conduct a finan cial fire drill -- a rehearsal of what should be done if the unexpected oc curs. The concept of a financial fire drill means to educate your survivors before they are survivors. Leimberg offers the following guidelines for a financial fire drill: • Dp I know how to cope? Do I know whom to call? Am I prepared to face my spouse's or my own disability? • Is estate planning only for the rich? No, the rich can afford to lose more.Those with modest or moderate circumstances suffer more because every dollar means more. • Who needs estate planning? Minor children; retarded, learning disabled, emotionally disturbed, physically or mentally handicapped beneficiary; a beneficiary who can't -- or doesn't want to -- handle large sums of money or manage real estate or a large stock portfolio; anyone with property in more than one state; those charitably inclined. • What problems will estate planning help to avoid? Excessive transfer costs; lack of liquidity; improper disposition of assets; inadequate in come at retirement, at disability, for family at death; insufficient capital to pay off debts, to send children (or grandchildren) to college, for emergency or opportunity. • How to solve these problems: Create estate tax-free wealth. Divide -- and conquer. Deduct. Discount. Eliminate tax on existing wealth. Freeze your estate's growth. • What's to a will and what about it. A will defines the way you say what you want done with your assets when you die and whom you want to guide your property to the proper hands. • Without a will - what? You can't say who gets your property; who will • •• be your executor and guardian; how much each person gets or what asset goes to each person; when each person gets hit or her share; how property will be received (outright or in a trust); how your executor is to minimize taxes. Questions to ask yourself when preparing a will: Do we trust the per son who is named as the primary ex ecutor? Secondary? Have we named backups in case the person(s) we have named is unwilling -- or unable -- to serve? Have we selected a person who: has little or no business, investment or money management experience? May h a v e a n i n t e r e s t a d v e r s e t o beneficiaries? Hasn't got the time or inclination to devote to proper estate administration? May not get along with one or more of our beneficiaries? Will the guardians presently named raise our children as we would like? Have we. considered the financial burden we may be placing on them? (Can they afford to raise our children - and theirs?) Do they know we've named them? (If we haven't asked, how do we know they'll accept?) Does my spouse have a will and if so -- is it coordinated with my will and our employee benefits and life insurance? A trust is beneficial if: I want income a n d e s t a t e t a x s a v i n g s ; m y beneficiaries lack mental, emotional or legal capacity or desire to handle an outright gift; I want to insulate assets from the claims of my creditors; I want to equalize benefits among my children but get extra income or capital to those who need it the most; I'd like to coor dinate all my assets, my life insurance and employee benefits; I'd like privacy. "Letter of instructions" -- Not legal ly binding but a good place to say those things you never could. Here's what to cover: How the obituary should read; the type of funeral, any particular instruc tions; provisions for donating body or organs to science or donees; should heirs retain or sell the business - if sell, suggest severance pay provisions, who potential buyers are, what to do with office records, how to handle par ticular problems; who the heirs can trust and how far. The bottom line: Keep all documents and information in secure places such as a bank safe- deposit box or your lawyer's or accoun tant's office. Each year, show your loved ones in writing where their financial security stands. Educate your survivors before they become survivors. Measure your financial needs, establish your own priorities and then develop annual plans to make sure you stay on target. FROM SHARP MINDS COME SHARP PRODUCTS i- Hi mm V V V WB. W Hi |PP YOU SAVE BIG!! SHARP Model VX-1612 A GREAT Light Duty Print/Display Calculator For The Home! •10 digit •Print/Display •MEMORY (REG. $109.50) SALE PRICE *79 OR BUSINESS SHARP Model CS-1680 Come and See Why We Feel This is the Finest Heavy Duty office calculator on the market today! yC •10 Digit •Print/Display •Memory •Balance Addition •Much More (Rag.sit9.oo) SALE PRICE *129 © 93 GRANT STREET CRYSTAL LAKE, ILLINOIS 60014 (815)459-1226 McHenry countr win Machines, lac. 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