As 2018 draws closer, creating or updating your estate plan may not be on your list of resolutions. Although no one relishes the idea of planning for a time when they will no longer be around, estate planning is one of the best ways to take care of those you love. This applies no matter how much money or assets you have.
If you haven’t created an estate plan yet, now is the time to make the arrangements that will express your wishes for your future medical care, take care of your family financially, and ensure that your children are provided for if something happens to their parents. If you own a business, estate planning can contribute to its ongoing success and preserve your legacy.
If, on the other hand, you do have a will, trust, durable power of attorney, and life insurance policies in place, they should be updated if you’ve experienced major life events since they were originally drawn up. While estate planning documents do not necessarily become invalid just because time has passed, they can become inconsistent with your current circumstances, and should be reviewed.
Your will allows you to specify how you want your assets distributed and your minor children cared for after you are gone. If any of the following events have affected your life since your will was last created or updated, it’s time to review it:
- Marrying or entering into a civil partnership
- Divorcing the spouse mentioned in the will
- The birth of a child
- Changes in your financial circumstances
- The death of a designated beneficiary
- The inheritance, purchase, or sale of significant assets
- A named executor or trustee dies or becomes unsuitable to act
You can update your will by creating an entirely new one or adding a codicil, a document that changes existing provisions or adds new ones.
- Durable Power of Attorney
A durable power of attorney appoints another person (generally a family member) to act on your behalf in legal and financial matters if age, injury, or disability leaves you unable to make such decisions for yourself.
- Healthcare Power of Attorney
Healthcare power of attorney/proxy laws permit you to appoint someone you trust to make medical decisions for you if you lose competency for any reason. Such loss can be temporary, such as being under general anesthesia, or permanent, which can happen if you suffer from Alzheimer’s or suffer a severe brain injury. Having such an agent in place can ensure that future healthcare providers follow your wishes.
Trusts are not just for the super-wealthy. Even people of modest means can use them to:
- Avoid probate, which makes your will part of the public record
- Protect your assets
- Provide for children from an earlier marriage
- Hold money and assets for minor children
- Protect assets from creditors and even former spouses
There are different types of trusts, each with a particular purpose. Which ones are right for you will depend on your assets, family situation, and personal circumstances.
- Life Insurance Policies
If you’ve married, divorced, had children, or experienced any other changes to your family situation, you should review the beneficiaries for your life insurance policies and other accounts. Contact your financial institution, retirement plan coordinator, and/or insurer to request copies of all beneficiary designations. Any asset with a beneficiary designation, such as insurance proceeds, are outside the scope of your will so it is important to confirm that everything is in order. Otherwise, your ex-spouse could receive money that you really wanted to go to your children.
At Rosen Law, we can help you protect your future by putting together a comprehensive estate plan or updating your existing one, so that you go into the new year with greater peace of mind. To schedule a consultation to discuss your estate planning needs and goals, call us at (516) 437-3400, or contact us here.