5 ESTATE PLANNING RESOLUTIONS TO FOLLOW IN THE NEW YEAR
Change is inevitable, but preparation is not. If you don’t invest time in estate planning, your family could be caught unawares by a sudden change nobody has prepared for. With the new year upon us, why not add estate planning to your list of resolutions? Many unforeseen events occur every year, and in case of sudden misfortunes, it’s wise to protect your loved ones and assets. Below are five estate planning resolutions to consider for the new year, or any time, really, if you are reading this long after the new year:
1. Understand Why You Need an Estate Plan
You’re off to a good start if you already have a will; however, it may not be enough. As explained in one of our former blog posts, a will has limitations, and even if it gets your assets distributed the way you want, will not make the easiest path for your family members. Where a will merely expresses your basic wishes, comprehensive legal documents confirm your beneficiaries will receive specific assets, and smooth out the process for them so that assets can be distributed more quickly and without unnecessary legal and court expenses.
Estate planning also ensures you have appointed decision-makers for medical and financial matters in case you are incapacitated and unable to make decisions. Drafting and implementing your power-of-attorney and health care proxy, or updating them if circumstances have changed for the people you designated previously, is one easy step to take in the new year. Another is to check your life insurance policies and retirement accounts to make sure that your designated beneficiaries are up to date.
2. Have the Necessary Tough Conversations
No matter how delicate and sensitive it may be, one should not avoid conversations about death and disability. It’s better to discuss vital decisions and issues with your loved ones now, such as dividing assets, to eliminate friction and ill-feelings escalating. It’s imperative for family members to know and agree on an action plan in case of incapacity or untimely death. Also, at a very basic level, if you have invested time and money in creating an estate plan, you want to make sure your family knows where to find it, and knows who is going to be responsible for administering your estate. If you haven’t done so already, make it a priority to arrange those types of family discussions during the new year.
3. Make Time for an Update (If You Already Have an Estate Plan)
If you already have an estate plan in place, make sure to keep it updated. Significant milestones or life events, such as marriage, divorce, career change, or children who’ve reached adulthood can significantly affect your current estate plan. There is also the possibility of law and tax changes within your state that can do the same. It’s wise to review your estate plan periodically to ensure everything is up to date. If you do nothing else to start the new year, a simple call to your estate planning attorney to ask whether anything has changed in the law is an easy way to put your mind at ease for the rest of the year.
4. Create Specific Goals for Your Assets
To whom do your assets pass down after your passing? Are you passing on things that can be easily divided between your heirs, like money, or do you have to figure out how to liquidate or divide things like real property? Do you own a business that you intend for someone to carry on for you into the future?Do you have body of creative work that you want either given to specific people, published, destroyed, or some combination of all three? Are you aware of all of your assets? Before naming beneficiaries and making arrangements, it’s best to have full knowledge of all of your assets. Once you’re fully aware of what legally belongs to you, it’s easier to make the decisions for your family and loved ones accordingly. Another easy step to start the year on the right foot is to make a simple list of what you have and where you want it to go. Once you do that, you can easily hand off the work of creating your estate plan to your lawyer.
5. Prepare for the Unexpected
Death isn’t the only unexpected misfortune that can affect your family. What if you have an accident or illness that creates the need for long-term care, or renders you incapacitated temporarily? More than often, disabled individuals cannot make sound decisions about their finances or legal assets on their own, and sometimes even if you eventually make a full recovery a could be unable to make those decisions for weeks or months. Take into consideration the possibility of unforeseen events and establish plans that protect your loved ones. The simplest way to do this is to prepare a durable power of attorney and a health care proxy for each adult in your family, making clear who will be authorized to make those decisions.
An attorney can help you through your decision-making process, ensuring everything is up to date by both terms of law and personal life changes. The trusted attorneys of SLN Law are skilled at thoughtful estate planning, offering proper guidance on decisions that can protect your family from all circumstances.