Grief manifests itself in unusual ways. Sometimes, it tears families apart. Helping people deal with their grief by leaving your affairs in order is one of the most lasting gifts you can give. It is your legacy.
When to Update Your Estate Plan: Estate plans, once out of sight, are often out of mind. However, it is important that you keep your estate plan current since any of these events can significantly change the outcome:
Marriage or dissolution of marriage
Changes to your family by birth, adoption, or death
Someone named in your will predeceases you
Your children are grown or have married
You move to a new state, or your state’s laws change
A large change in the value or nature of your estate
You or your spouse retires
It’s just been a few years
As your life evolves, so should your estate plan.
The Risks of Doing It Yourself: The execution of an estate plan is a delicate process, and the rules are strict. Some documents must be witnessed and notarized, while others should not be. Leaving a field blank or signing in the wrong place can invalidate the entire document.
With so many people signing so many documents, it’s easy to overlook something. Errors in executing documents can be the same as not having them at all.
Additionally, we have probated home-made Wills that unintentionally made settling the estate much more expensive and complicated than it otherwise would have, and which invited conflict among the heirs. At the same time, there are particular phrases that, when used correctly, can vastly simplify the process.
Not having a valid estate plan can result in unintended consequences and can easily be more expensive than the cost of creating one.
A Will is the centerpiece of most estate plans. A Will can transfer property to the heirs you choose and control how that transfer will take place (Probate). Don’t confuse this with a Living Will, which is an advance directive to your physician about end-of-life care.
When someone dies without a Will it is called intestacy. Local judges follow the state legislature’s instructions for people who don’t leave behind a valid will. Here are some possible outcomes:
Children from a previous marriage become co-owners of the surviving spouse’s home.
If your heir dies a week after you, your property will pass through them, and then to their heirs, with each transfer requiring a separate court proceeding.
A court may have to supervise the distribution of your property, which can be costly
Your estate’s administrator may have to post a bond.
If you own property in another state, your estate’s administrator may have to go through the other state’s probate process in addition to ours.
In the most extreme cases, all your property could go to the state.
Trusts give you greater control over how
your estate is managed.
An inheritance can sometimes be disruptive when the recipient is not in a position to manage it wisely, either because of age or some other consideration.
Trusts are an enormously flexible estate planning tool, and they are used for a wide variety of purposes. These include:
The ability to control your assets long after you are gone
Shielding assets from creditors
Providing for someone (including yourself) who is disabled or has special needs
Leaving behind assets that are difficult to divide
At its most basic, a trust separates the role of legal ownership (the trustee) from the right to benefit (the beneficiary).
The person who creates the trust (the settlor) can reserve the right to take the property back (a revocable trust), or they can relinquish this right (an irrevocable trust). Trusts can be created during the settlor’s lifetime (an inter vivos trust) or through a Will (a testamentary trust).
Also called a Directive to Physicians or Advance Directive, a Living Will lets you state your wishes for medical care in the event you are unable to make decisions for yourself.
DESIGNATIONS OF GUARDIANS
These documents designate a guardian for yourself if you become incapacitated or your children if they are minors.
POWERS OF ATTORNEY
Used to appoint another person to make medical or financial decisions on your behalf if you are ever unable to do so.
Gives medical professionals authorization to discuss your care with your designee.
This includes organ donation, funeral arrangements and anything else not covered in the rest of your plan.