Articles Posted in Estate Planning

Much like the process of building a house, the steps to building an estate plan should be well-defined and carefully considered.

Here are some things to keep in mind when creating your estate plan:

· Get the right “builder.” Just like for a house, you will most likely need to hire an estate planning professional to make sure that what is built is done correctly according to your goals and the vision you have in mind. You will make your wishes known, of course, but you will rely on the builder’s expertise.

A number of couples, including some who have been together for many years, choose not to legally marry for a variety of personal and financial reasons. Sometimes older couples decide against marriage because they don’t want to affect their children’s inheritance. There are others who don’t want to deal with the legalities of marriage. Some people would lose social security benefits or pension if they decide to remarry.

It is extremely important for couples who are not married to make their wishes clear in their estate planning documents when it comes to the rights and responsibilities they want their significant other to have. A non-married partner doesn’t have the same legal rights that a married spouse has. A significant other does not have a statutory priority to serve as a personal representative or executor for the estate of their partner, statutory right to inherit their partner’s property, priority to make disposition of their partner’s last remains, or priority to act as their partner’s guardian or conservator should they become incapacitated or disabled.  There is also no requirement to give notice of withholding of life support for a non-married significant other.  However, anyone may execute estate planning documents so that their significant other will have these legal rights.

An unmarried individual will want to make sure to execute a will, a health care power of attorney, a general durable power of attorney, and a living will to protect their significant other. A Last Will and Testament designates an executor to be in charge of one’s estate, and it also designates who will inherit which assets from this estate. No assets will pass to your significant other (unless they are owned jointly or you have named them as a beneficiary) without a will.

In the wake of the pandemic, the topic of estate planning has suddenly become a lot less taboo, according to Lee Baker, a certified financial planner based in Atlanta. “We get more calls around estate planning,” he says.

Baker is the founder, owner, and president of Apex Financial Services and is a member of CNBC’s Advisor Council.

“The last 36 months shifted the mindset,” explains Baker. “A lot of people have taken this opportunity to reassess.”

If it’s been years since you drafted or last updated your will, it likely references many of your existing assets, such as retirement plan accounts and life insurance policies. You also have paperwork on file with the applicable financial institutions. It’s possible that you have modified one of these documents after life events such as new births, deaths, or relationship changes without updating the other document.

It’s important to keep your will as well as your retirement plan or life insurance documents up to date. If your will names different beneficiaries from your documents on file, which one controls who these assets go to?

The beneficiary designations in your retirement plan and life insurance documents supersede what is written in your will. However, having different beneficiaries listed could cause conflict, confusion, and turmoil for your loved ones. It’s possible that one party may even try to legally challenge it.

In the last post, I wrote about 5 different major life events and changes for which you should revisit and potentially revise your estate plan. Here are 3 more life changes that are cause to take another look at your estate plan and update your documents if necessary:

1. You may need to change important individuals within your estate plan. If you haven’t updated your estate plan in many years and previously chose a Personal Representative, Agent for your Power of Attorney, or Trustee, take time to revisit this selection. Evaluate whether the individuals you named are still the best choice for your current family and estate situation.
2. You start or purchase a new business. Although a lot of business owners do an excellent job of building successful businesses, there are less business owners who take the time to create a good succession plan or properly incorporate their succession plan into their estate plan.

Perhaps you met with a lawyer and created an estate plan when you were younger, soon after getting married and having children. Now your kids have grown into adults and may be married and/or have children of their own.

No matter your specific life situation, there are a number of life events and changes that need to be reflected in your estate plan and will likely mean your estate plan needs to be updated. Below are 5 examples of major life changes for which your estate plan needs to be revisited:

1. You have divorced, been widowed, remarried, or are in a relationship and living together. Following any big change in your family and relationships (new arrivals or departures), make sure to review your estate plan to ensure that your estate is going where YOU want it to go.

No one wants to think about their own death, and planning for one’s own funeral isn’t easy. Immediately following a loved one’s death, family members are already very distressed. It is hard enough to follow through with funeral arrangements that have been outlined in one’s will or other estate planning document. It is far more difficult when no arrangements have been made at all.

Family members might also live in different places around the country or world. Coordinating a funeral from far away can be very complicated and stressful.

You can make things much easier for your family members and loved ones by designating one person to take on the main responsibilities of your funeral and issues related to it. The executor is often chosen for this role, although it may make more sense to designate someone else depending on your situation. Choosing ahead of time who will make sure your wishes are carried out can provide some comfort and assurance to you and your loved ones.