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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When Do I Need a Medical Power of Attorney in Washington State?

When Do I Need a Medical Power of Attorney in Washington State?

If you are searching for estate planning needs, you will likely come across the concept of a “Medical Power of Attorney.”

We wrote this article to help you understand what a medical power of attorney is, when you would need one, and how you would obtain one. 

What is a Medical Power of Attorney

A medical power of attorney may also be known as an advance care directive.  The medical power of attorney is a legal document in which you choose a person you trust (an agent) to make medical decisions on your behalf when you are unable to do so.  You can set up your power of attorney to state when and in what situations you want it to become effective.  For instance, it can be set up only to become effective after you have been deemed unable to make decisions on your own by your medical provider, or you may set it up to be more broadly applied to your life without needing any particular triggers to occur first.

In your medical power of attorney, you will be able to specify what you want your agent to be able to do on your behalf, including:

  • Sign medical documents on your behalf
  • Giving, withholding, or withdrawing informed consent including medical and surgical treatments
  • Decide if you receive life-prolonging interventions or psychiatric treatment
  • Determine if you are going to go to a nursing home, have hospitalization, or treatment in a nursing home or your own home
  • Decide measures for pain relief
  • Have access and control of your medical records

*When you choose an agent, make sure it is someone you can trust to follow your wishes.  Discuss your wishes with them and leave specific instructions in your medical power of attorney. 

It is also a good idea to appoint an alternate agent in case your agent is unable to make your health care decisions or is unavailable.

When You Need a Medical Power of Attorney

You need a medical power of attorney if you are unable to make your own decisions, or if you fear that this type of situation could or might occur.  Some things that can cause you to be unable to make your own decisions are:

  • Alzheimers or dementia
  • Brain injury
  • Severe illness
  • Coma
  • Age
  • Unconsciousness from an accident
  • Under anesthesia and cannot consent to a more extensive procedure
  • An Unforeseen Accident

You can guess at this point that it is a good idea and precaution to have a medical power of attorney even if you are young, healthy, and not expecting any major medical issues.  If there is an accident that leaves you incapacitated, and you do not have a power of attorney, your care decisions could be left up to the judgment of someone who does not know you, your values, or your wishes at all.

Where to Get WA Power of Attorney Support

We have spent some time talking about what sorts of support you should avoid in your estate planning quest.  Namely, impersonal online “one size fits all” templates.  Moreover, we consistently update our award-winning Lilac City Law blog on topics covering the full range of estate planning services.  However, whether you are looking at a template, or seeking more understanding, nothing truly beats speaking to a subject matter expert on these things.  Please feel free to reach out to us at any point, and we will set up a dedicated time to get to know your situation and offer practical, timely, and thoughtful advice on issues relating to your medical power of attorney, or other estate planning needs.

Contact Us, We’ll Help You Set Up Your Power of Attorney

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