Estate Planning: For a new year’s resolution
We all make new year’s resolutions. The start of the new year is a natural time to reflect about all that is important to us and our plans for the future.
One area worth reflection is whether your affairs are in order in 2015-2016. Let us consider some issues worth examining.
Do you have an estate plan that protects you and your family should you became incapacitated and, ultimately, when you die?
If not, then you clearly have serious thinking to do.
Who will step in should you become incapacitated to control your financial, property and health care decisions?
If you have minor children, who will care for them if you are gone? How will your estate be settled when you die?
Will your heirs have to deal with probate because you have assets that are collectively worth more than $150,000?
Does your existing estate planning reflect your current needs? Life events such as divorce, deaths and births are among the most common changes to the family picture. The longer it has been since your estate planning documents were prepared, the more likely it is that they need to be reviewed and revised.
Out of date documents may have adverse consequences to you and your family when actually needed. Fixing the situation now “when you are still able to do so without any compulsion” is much less worrisome and costly in the bigger scheme. Some things cannot even be fixed later.
Do your existing estate planning documents reflect the current state of the law?
For example, does your existing living trust still require a two trust division at the death of the first spouse, even though the estate tax exemption amount is now $5,250,000? If so, then unnecessary extra legal work, expense and complications may arise.
Even without changes affecting you and your family, is your existing estate plan as drafted sufficient to your needs?
If you are not comfortable that your documents are sufficiently flexible to address both foreseen and even some unforeseen possibilities that are not unrealistic, then you may wish to revisit your estate plan.
Generally, one should review estate planning documents at least once every five years, sooner if there are compelling changes relating to you, your family and relevant laws.
Procrastination and apprehension over one’s mortality are common reasons why people indefinitely postpone getting their affairs in order.
Don’t delay. It is far easier to get your affairs in order when you have no compulsion to do so and when times are easy, as opposed to in an emergency when others may have to go to court on your behalf.
Start 2014 by getting your affairs in order; this provides immediate peace of mind for you and greatly reduces stress on your loved ones in the future.