In our current climate of uncertainty, we have received a number of questions regarding proper planning for assets and businesses. Knowing these questions are on many minds, we are reaching out to provide some general answers to the estate planning questions we’ve heard the most.
What estate planning documents should I have in place in the event something happens to me?
While the specific needs of individuals, couples, and business owners may vary, we recommend that most estate plans be comprised of at least the following documents:
- Medical Power of Attorney and Advance Directive to designate someone you trust to make medical decisions if you cannot and to express your wishes regarding those decisions
- General Durable Power of Attorney to designate someone you trust to make financial transactions on your behalf during your life if you are unable to do so
- Will and/or Trust to express your wishes for who will manage your estate after your death and how your assets will be distributed
- Instructions for Disposition of Last Remains to clearly express your wishes for how your remains and any memorial or funeral events are handled
- Appointment of Guardian for Minors to express your wishes for who will care for your minor children in the event you are unable to do so
Is my current estate plan sufficient?
You may already have an estate plan in place. We recommend that you review the list above to make sure you have all of the applicable recommended documents. We also recommend having your estate plan reviewed approximately every three to five years, or if any major life events have occurred, such as the following:
- New family members (births, adoptions, etc.)
- Deaths in the family
- Purchase or sale of a house or other real estate
- Marriages or divorces
- A move to a new house
- Acquisition or sale of any significant assets
- Start of a new business
What other measures should I take to ensure my estate is in order?
Besides making sure that you have the above documents in place and up to date, there are other things you can do to make things as clear as possible for anyone trying to step in and manage your affairs:
- Check your beneficiary designations on all bank accounts, retirement accounts, stocks, life insurance policies, etc. Naming beneficiaries ensures that these assets pass directly to the person named, avoiding the probate process, so make sure that you take advantage of this option and that your designations are up to date.
- Make a complete list of accounts, insurance policies, and other assets to make things easier for whomever you place in charge of your estate. A worksheet can be found on our website under the Resources tab in the Articles & Free Downloads section.
- In addition to the list above, make sure you have a record of login information and passwords for bank accounts or other assets you access electronically. In the digital age, many people do not receive paper statements, so logging in may be the only way for your agent or personal representative to access account numbers and other important information.
What estate planning mistakes should I avoid?
If you do decide to take action to make or update an estate plan, keep the following in mind:
- Don’t panic or rush! In the current climate, many people have a tendency to make rash decisions. There’s no need to add more stress to an already stressful situation. In addition, mistakes get made and shortcuts get taken when people attempt to prepare and file documents in a hurry.
- Don’t try to DIY without proper research. In an emergency, any will is usually better than no will. However, we caution against preparing wills, deeds, or other documents without professional assistance, review, or at least thorough research. For example, we have seen numerous cases where self-made wills are contested or disputed (leading to thousands of dollars in legal fees and unnecessary family strife) because they lack clarity or are not properly executed.
- Don’t make transfers of assets or real estate without looking into the financial implications. For example, large financial gifts could have an impact on Medicare eligibility, and adding individuals to property deeds could have significant tax and liability ramifications.