2019 New Year’s Resolution: Your Estate Plan
The start of a new year can be a time of commitment to self-improvement, accomplish a personal goal or otherwise improve one's quality of life. For many, estate planning may not be at the top of their list of New Year’s resolutions, but it should be. An estate plan is a crucial step in securing you and your family's future. Planning for an unanticipated death or disability should be a priority for 2019. There is no time like the present to evaluate the planning that you have or have not undertaken.
Why Have an Estate Plan?
There are two widespread errors in estate planning. One error is not having a plan or other key elements of a plan. The other error is to fail to update an existing estate plan. If you do not have an estate plan, the state may intervene and impose a plan on you and your family.
Your estate plan should include documents that appoint agents to act on your behalf if you become incapacitated. Without a proper estate plan, if you become incapacitated and are unable to manage your assets or make personal decisions, a guardianship through the court may become necessary. A guardianship proceeding can be stressful and time-consuming, and it may mean that a judge selects someone to make decisions on your behalf that is inconsistent with your personal values.
If you do not have a will or trust determining the division of your assets upon death, the laws of the state you reside in will decide who receives your assets. This can result in a distribution of your assets that may not align with your wishes. Taking the time to prepare your estate plan saves your family time and money during what is likely to be an incredibly emotional time. Think of it as a gift to you and your loved ones.
When to Update an Existing Estate Plan
Just because you did an estate plan at some point in your life does not mean you are finished. Estate plans should be reviewed and revised from time to time to make sure that they are consistent with your current situation and goals.
The time to revise an estate plan varies. If your estate plan is three or more years old, you should revisit it. Also, an estate plan should be reviewed if you experience significant life events. These events or changes in circumstances often create a need to update the plan.
Below are examples of events that indicate you should review and perhaps update your plan with an attorney:
- Birth of a child
- Receiving an inheritance
- Your assets or liabilities change
- Moving out of state
- Marriage or divorce of any of your children
- Any of your beneficiaries develop significant health or mental health issues
- Your qualified retirement plan and named beneficiaries are outdated
- Executors, trustees or guardians for minor children become inappropriate
A Plan Created To Fit Your Needs
It is never too early or too late to establish an estate plan for you and your family. No one likes to think about disability or death, but estate planning gives you control over what will happen to you and your assets after disability or death. A strategic, carefully developed estate plan will also provide peace of mind to your loved ones. For many families, an estate plan can help minimize the impact of estate taxes. A skilled, knowledgeable attorney will be essential in creating a plan drafted precisely for you and your family’s needs.