12 Months of Estate Planning: A Plan to Get Your Estate Plan Set up in 2020

12 Months of Estate Planning: A Plan to Get Your Estate Plan Set up in 2020

Estate planning can be one of the most important things you do for your family’s future, but it can also be overwhelming. Between heavy subjects you don’t want to think about, the need to do a lot of paperwork, and everything else going on in your life, it can be too easy to keep putting off your estate plan until later. The problem is you never know when you will need it. Get started before it’s too late by doing just a little bit at a time.

January: Determine Your Goals

Who do you need to take care of? Do you have a spouse that relies on your income? Children that still need an education? Grandchildren that you want to give a head start in life? Charities or other important causes that you wish to support?

Your estate plan isn’t a chore you have to check off to be a responsible adult. It’s something you want to do to achieve your goals. There are many types of estate planning tools available that work best in different situations. To pick the right tools, you need to begin with a plan for what you want to do — just like drawing up the blueprints for a house.

February: Take Inventory

After you know who you want to support, you need to know how you can. What assets do you have? Your home? Cash savings? Investments? A business? Family heirlooms?

When you divide your estate, you may wish to provide some loved ones with financial support and others emotional support in the form of specific items that will mean more to them. It’s also important to understand that if you have any debts, your creditors will take precedence over your heirs, so you need to account for those as well.

March: Create a Will

Wills are the most common estate planning tool because they are the simplest way to ensure that each of your loved ones is cared for in the way that you’ve chosen. You can create a will on your own, but there are some legal technicalities that could leave your will open to challenges or having some of your wishes not honored. An estate planning attorney can help you avoid those complexities. Even if you plan to use other estate planning tools, having a will is still a good catchall for things that may not otherwise be covered.

April: Name Beneficiaries

When you name beneficiaries on your bank accounts and investment accounts, those accounts automatically go to your chosen beneficiaries upon your death. This allows those beneficiaries to receive financial support without having to wait for your will to go through probate.

The main benefit to taking this step is so that any family members who need immediate financial support can receive it. For example, if they relied on your income to cover their living expenses, they may not have enough money to buy groceries or to make rent or mortgage payments on your home that they continue to live in.

May: Consider a Trust

A trust is another way to keep assets out of probate and transfer them directly to family members. Again, the goal is to skip the weeks or months of delays it takes to execute your will in probate.

A trust can also be used to ensure that the funds you leave go towards your intended purpose. You may leave a trust for your spouse’s living expenses or your children’s schooling. You may also restrict your children’s or grandchildren’s access to their inheritance until they are older and wiser and will hopefully put it to good use.

June: Plan for Your Healthcare

In addition to planning for what happens after you’re gone, you also need to have plans for what happens if you can’t make decisions for yourself while you’re hospitalized for a serious accident or illness. Even in close families, family members may disagree about what you want, and doctors may not be able to legally follow their instructions.

To ensure your wishes are honored, consider a living will, advanced healthcare directive, or medical power of attorney. These documents allow you to designate a trusted loved one to make decisions on your behalf with full authority. You can also include any specific treatments or end-of-life options that you want your agent to request on your behalf.

July: Designate a Financial Power of Attorney

Like the person you select to make your healthcare decisions, your financial power of attorney will step in if you’re unable to manage your finances. A full durable financial power of attorney gives your agent the ability to manage your bills and assets if you’re ever temporarily or permanently incapacitated.

You can also use a financial power of attorney when you’re still able to care for yourself to some degree but need extra help with certain tasks. For example, you might sign a limited scope power of attorney allowing a loved one to manage your checking account and pay your bills.

August: Look Into Life Insurance

Life insurance is another tool you can use to provide for your family financially when you’re unable to. Many working people opt to buy a policy large enough to replace their expected future income to protect their spouse’s and children’s lifestyles that were planned around that income. You can also use life insurance to guard against things like medical debts from reducing what you can leave to your family.

As with your other assets, you will need to name one or more beneficiaries in your life insurance policy or provide for the cash value of the policy when you write your will.

September: Plan for Estate Taxes

Estate taxes generally only affect families with multi-million dollar net worths, but you still need to be aware of them. Estate taxes can be particularly devastating when your net worth is mostly in real estate, a business, or other non-liquid assets. This type of situation often forces a family to sell a treasured home or multi-generational business to pay the tax bill. By planning how you structure your estate ahead of time, you can avoid taxes or at least make sure your family will have the ability to pay them.

October: Protect Your Business

In one sense, a business is like any other asset. You can leave it in your will to a loved one, or it can be part of your general estate to be divided up between your heirs.

However, businesses also have to be maintained if they are to continue to provide for your family. The death of an owner or key employee can be highly disruptive to the business and possibly even put it out of business. You should create a succession plan that provides for continuity of operations no matter what happens and that also gradually prepares your loved ones to follow in your footsteps if that’s your goal.

November: Organize Everything

Your estate plan is no good if no one knows about it to put it into action. Keep all of your important documents together in a fireproof safe that your family knows the location of. You may also wish to leave copies with your attorney or in a bank safe deposit box. Again, tell your family.

When you have a medical power of attorney or financial power of attorney, give copies to your doctors or banks in advance. Don’t forget to give them updated documents if you change or cancel your existing plans.

December: Review Everything Each Year

When you stop to reflect on another year gone by, think about how the changes during the year will affect your family’s future. New children may be born, others may grow up and no longer need as much help, and you may have new wealth to consider. While you don’t need to redo your estate plan every year, you should update the relevant portions of it after major life changes so that it continues to meet your goals for your family.

Estate Planning with Lilac City Law

Lilac City provides a full range of estate planning services and can help you develop a comprehensive plan for you and your family. We can help you put it together over the next year or help you get it done even faster. To learn more, contact us now to schedule a consultation.

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How to Help Your Family Use Your Estate Planning Forms in An Emergency

How to Help Your Family Use Your Estate Planning Forms in An Emergency

In an emergency, everything is chaotic and stressful. Family members are often distraught and unable to clearly (and quickly) think about your wishes.

What will happen to your children if you and your spouse are no longer able to care for them or yourselves? How will your family know your wishes or have access to any legal information?

Using your estate planning forms can help your family and prevent them from having to go to court to receive authority to make decisions if there is an emergency.

Here are six estate planning forms and ideas you can use and how they can help your family in an emergency.

Guardianship Plan

A guardianship plan lays out your wishes for your children if you, or yourself if you become incapacitated. This estate planning form gives medical, financial, and legal decision-making abilities to a trusted person you choose. This person will act on your behalf when making these decisions while ensuring your wishes are considered.

Why is a guardianship plan important to have in an emergency? A guardianship plan can be used to give a trusted person temporary guardianship of you or your family (kids) in case of an emergency. We are talking about if you are unable to care for your children because of a hospitalization or a severe injury.

The person you choose will be able to make educational and medical decisions in your place for the child until you are well enough. If you, unfortunately, die during an emergency, your children will know where they are going and who is going to take care of them; hopefully making the transition a little easier.

If you work with an attorney to set up a guardianship plan, they will have a hard copy available. However, as with all plans, you should go over the details with all those you identify in the plan as potential guardians. Go over who to contact, in what order to contact them, and game plan different scenarios. Your family protection plan attorney will help you figure this all out and ensure you have all necessary guardianship and estate planning forms set up.

Healthcare Power of Attorney / Health Care Directive (Living Will)

A healthcare power of attorney (HPOA) legally allows a person of your choosing to make decisions regarding your healthcare. This HPOA can be as broad as possible, or you can limit to specific types of decisions made for you. Sometimes, healthcare power of attorney will be combined with a health care directive or living will. A healthcare directive specifies what you want if you need life-saving measures. Some of these may include whether you receive artificial hydration (IV) and nutrition (feeding tube), or if you do not wish to be resuscitated in an emergency.

These forms are very beneficial to have in an emergency. If you are admitted to the emergency room, the hospital will do everything in its powers to keep you alive. They will put you on a life support if needed. However, what if that is not you want? Filling out a health care directive will lay out your wishes and enable a person of your choosing to make those wishes happen for you.

If you do not have a health care directive, then having a healthcare power of attorney (POA) gives a trusted friend or loved one the opportunity to make your wishes known. Having these forms (and putting them where a loved one can find them) will allow your wishes to be met in an emergency situation.

To use them in an emergency, make sure these forms are available and accessible to your loved ones. Create a phone call list and instructions for your family, spouse, kids, babysitter, etc. to follow in case they need to contact the person you designated to make these literal life or death decisions for you.

Financial Power of Attorney

A financial power of attorney is very similar to the healthcare power of attorney in that you are choosing a person to make decisions on your behalf. The biggest difference is that in this case, you are allowing a trusted person to make financial decisions or acts such as withdrawing money from your bank account our signing papers for you regarding real estate.

Appointing a financial power of attorney (POA), will allow your finances to be kept in order either after you pass or while you are incapacitated. In an emergency situation, the financial POA can supply the guardian of your children funds to be able to care for the children or even pay your medical bills you are accruing if you are hospitalized.

Ensuring you have your financial POA stored in an accessible location with your other estate planning forms is a necessity for the person that you are designating to start taking steps to handle your finances. Keep your forms somewhere they can be accessed and leave instructions for accessing and using them to your next of kin. Your estate planning attorney will also maintain a copy, so keep us on your contact list as well.

Insurance Policy & Other Important Estate Planning Forms and Documents

Having a life insurance policy in place will greatly help your family financially if something happens to you. Life insurance will help replace lost income, cover burial expenses, pay off any of your debt, and pay any estate taxes.

In addition to life insurance there are many other important documents:

  • Final arrangement plans to let your family know the particulars of your final arrangement. This will ease their need to make decisions.
  • Contact sheets giving your loved one contact information for important people such as babysitters, neighbors, who to contact if you do not come home, etc.
  • Trusts which pass on specific assets to a beneficiary bypassing probate.
  • Tax documents
  • Investments
  • Photographic itemizations of assets

Again, having these forms done and put somewhere easily found, will help put your family at ease. It could be the difference between your children being placed immediately in the custody of a close family member or family friend (by your designation) or them ending up in foster care while a court determines who is the most appropriate caretaker, if any, amongst your family and friends.

If you want to know more about how this could all play out, read: WEAR CLEAN UNDERWEAR. We will even provide you a copy!

Password Lists As An Estate Planning Form?

Having a list of passwords almost seems silly. Why set up a password if you are going to document them? Your family may need to access accounts online and will not be able to without your passwords. In today’s technological age, many different things are done online and with passwords including online banking.

In an emergency, your family may need to access your online banking account, your email, etc. To do this, they will need to know what your passwords are. For example, you end up hospitalized and in a coma. The only way for your neighbor to contact your family is to access your contacts on your phone. How are they supposed to that? Keeping a list of passwords somewhere a trusted person knows about will allow them to access password protected things that may be needed in an emergency.

Account Lists As An Estate Planning Form?

A list of all of your accounts will also help your family know where to look for information such as banking. Listing your email account is important as well so your family can get any important information that may be sent by email. There is an application you can install on your smartphone that will allow you to list your accounts and passwords.

Just like a password list, a list of accounts will be helpful to your family in an emergency. If you pass away, your family will need to know where you bank, who you use for phone service, etc. They need to know so they can cancel accounts if need or change the terms of service.

Account lists are an often overlooked part of estate planning, but are something you should include in your estate planning forms if you have not done so already.


If you found this article helpful, take a look at A Young Family’s Guide to a Rock Solid Estate Plan