It can be easy for us to put off key estate planning issues but often waiting until an unforeseen event like a family death or sickness can prove too late. Estate planning helps to preserve the assets you worked hard to accumulate during your life and make sure they go where you want them to after you die. Proper estate planning will save your heirs time and expense.
1. Coordinating Changes to a Will or Trust with Your Financial Picture – It is important to make sure that as beneficiary changes occur that you update your financial documents. Often a designated beneficiary is put on a CD account, for example. The trust document is later updated and a bequest for that same designated beneficiary is added. Without changing the designated beneficiary on the CD account, that designated beneficiary may receive more upon death than what is designed.
2. Review of Your Estate Plan – It is important to review your estate plan for any possible changes when major events occur in your life. Major events that can affect estate plans can include marriage, divorce, birth or adoption of children, death, disability, sickness, purchase of significant assets, a significant change in your estate worth, and a purchase of property in a different state. A change in estate, trust and gift law may also necessitate a change in your estate plan. An out-of-date document could significantly increase your estate taxes.
3. Durable Power of Attorney – Even while married, no one automatically has the right to handle your assets. If you become incapacitated or disabled it is imperative that a durable power of attorney has been created. A durable power of attorney with an agent assigned will give that agent the power to handle your real estate and retirement plan assets.
4. Guardians or Conservators – Even if you do not envision a dispute among family members it may be important to designate a guardian or conservator. An agent appointed by the durable power of attorney can be used to handle financial issues but there are certain situations where it is very important to have a designated guardian or conservator, for example if you have minor or special needs children. Without nominating a guardian or conservator it is entirely possible that a court would appoint someone that you may not feel is fit for the job.
5. Health Care Directives – Provide directions and appoint an agent to make decisions for your medical care in the event you are not capable of expressing them yourself. Any person that has reached the age of majority, 18 to 21 depending on state law, should think about establishing a health care directive. Without a signed health care directive, your health care wishes may not be carried out with your intentions in mind.
Almost everyone needs to do estate planning. Estate planning is not just for millionaires. Anyone who wants to make sure their assets go to the right people and their intentions are carried out, should do estate planning. Contact your legal and financial advisors to make sure your important documents are in place and are up to date.