What happens to my assets when I am gone? The answer to that question is based on what you do now to address the distribution of your property. Waiting for a more opportune time to tackle the estate planning topic can have disastrous results.
For those we leave behind, the maze of paperwork, unknown wishes, courts, frustrated heirs, stress, time and financial costs can be significant. You can help make things easier for loved ones, clients, customers and business partners if you get busy making plans now.
Here are a few ideas to get you started:
Not many people like to think about their mortality. What are you afraid of when it comes to making plans for what happens to your hard earned assets upon your death? On the other hand, how many people have documents in place to help loved ones navigate their business affairs if they suffer a temporary illness, injury or incapacity? Things can get very messy when your spouse, child, parent, or business partner is trying to handle your business matters and you do not have a Power of Attorney authorizing them to act on your behalf. Many banks, financial institutions and medical professionals are reluctant to proceed without such documentation.
The excuses about why you do not have an estate plan are usually very weak. Some examples include: I am too busy, I do not have children, I don’t want to think about dying or my family knows what I want. Are you guilty of using a few of these excuses to justify the delay of planning your estate? If you do not make a Will that addresses your wishes and desires for what happens to your assets, then the state where you reside has one for you. Yes, states have their own lists of who has priority to handle the accounting and distribution of your estate. Even the guardian of your precious children can be left to the courts to decide, if you do not appoint a guardian in your Will. Do you want a court to decide who raises your children?
Look at what you have and determine who you would like to have certain assets (e.g., house, car, antique furniture, paintings, jewelry). Bank accounts, retirement accounts, life insurance and other financial assets can be handled by keeping your beneficiary designation forms up to date. Make sure that you inform a trusted individual about online bank accounts and insurances. Due to the increase in internet banking, many families are finding online accounts that they never knew a loved one had. Sometimes the lack of knowledge can be costly, like in the case of an insurance policy that lapsed due to lack of payment because no one in the family knew the policy existed. Do not forget your digital assets (photos, videos, music). What happens to your online footprint on social media? Who has pass-codes to my email accounts, if I am unable to access them? Do you have a trusted individual you can share this information with?
Hire a Professional
Quick fixes and low cost options are less than ideal when dealing with estate planning. If you cut corners now, the price to make adjustments or pick up the pieces later can be significant. In addition, seeking the advice of your financial advisor, attorney, accountant or other professional is wise. What if you have a child who has special needs and receives assistance? Do not want to jeopardize crucial benefits by leaving an outright inheritance to that child? Would you like to have a trust set up for minors with provisions for their education? Are you dealing with tax issues? Would you like to leave a gift to your favorite charity? Professionals can help coordinate the best plan for your circumstances, wishes and desires.
Get it done
Once you have prepared your estate plan you must keep it up to date. Check your documents and beneficiary designation forms after a birth, death, marriage, divorce, transfer of property or the purchase of new assets. Estate plans have many parts and changes may be required when major life events occur.
There you have it. Face reality, stop procrastinating, take inventory, hire a professional and get it done!
This post is for informational purposes only and is not intended to provide legal advice.
Aquanetta Betts is an attorney licensed in Washington, DC and Maryland. Her practice focuses on wills, trusts, estates, charitable giving and business law.