Each year around 75% of Americans make a New Year’s Resolution. However, less than 25% stay committed to them after just 30 days.[1] This year, as we say goodbye to 2020, resolve to be better prepared in 2021, including a new or updated Estate Plan to ensure your family is protected. Here are some things to consider in your Plan:
1. Create a Will or Trust
An Estate Plan is either will or trust based. A Will and a Trust both contain provisions designating how you want the assets in your estate (those that did not pass by beneficiary designation, etc.) to be distributed. However, a Trust has the additional benefit of avoiding probate when drafted and funded correctly.
2. Select Guardian(s) for your Minor Children
In the event you are unable to care for you minor children, you need to establish in your Will who will be the guardian for your children and raise and care for them until they are of majority age.
3. Establish Healthcare Directives
A healthcare directive designates who will make decisions about your medical care if you cannot speak for yourself. It also specifies your medical treatment wishes and end-of-life decisions, such as organ donation and cremation.
4. Prepare a Power of Attorney
A Power of Attorney can help you plan how your well-being and financial affairs will be looked after in the event of your incapacity. A Power of Attorney terminates at your death.
5. Review your Beneficiaries
A beneficiary is an individual and/or organization who receives assets such as life insurance and financial accounts after your death. It is important to make sure your beneficiary designations accomplish your estate planning objectives.
6. Fund a Trust
A trust can be an effective tool to avoid probate, minimize estate taxes, and ensure your assets are distributed according to your wishes. However, a trust needs to be funded to effectively accomplish this. Make sure the proper real estate documents, beneficiary designations, and other documents have been prepared and executed so they are controlled by the trust provisions.
7. Review your Assets
Make sure your assets such as real estate, ownership interests in companies, financial accounts, etc. are properly outlined and up to date. Also, review what goals you hope to achieve with the distribution of these assets. Check to see if increases in value have put you in a taxable situation warranting additional planning.
8. Create a Succession Plan
Creating a proper succession plan for your business enables you to make sure the company’s legacy is carried on in accordance with your wishes.
9. Consider Life Insurance
Life insurance can help protect your loved ones, allow for the continuing success of a family business and/or provides needed funds for unexpected expenses such as taxes.
10. Store your Documents
Make sure your documents are stored in a safe place. Also, make sure your executor or trustee knows where they are when needed.
Contact your Estate Planning attorney for more complete information on starting your planning or revising your documents.
[1] https://www.forbes.com/sites/ashiraprossack1/2018/12/31/goals-not-resolutions/?sh=1d1a2e343879
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