It’s that time of the New Year where you might have made a resolution and may be diligently working on it. You may have thought to yourself during the holiday season, after having received my newsletter all year, “I will get my estate planning done in 2015”. The time is here! All the holiday gifts for others have been paid for. Now it is time to give a very meaningful gift to your family that will last for years.
If you already have a plan but it is 10 years old and there have been some major changes in your life, it is time for an update.
Surprised? Don’t be. Your estate plan needs to change as often as your life changes. If there was a new member of your family at your table this year, or perhaps a missing member, then you might need to update your estate plan. If your gift list was longer or shorter this year, that might signal a change as well.
Perhaps you’ve never taken the time to create an estate plan at all. The idea may sound grandiose, but if you have any assets and anyone to whom you would like to give those assets, then you need an estate plan. Do you want to start another year knowing that your loss could put the loved ones in your life in an uncertain position?
A good start to an estate plan can be as easy as drafting a Will. A Will sets out who you are, who will be in charge of settling your estate when you pass away and how you want the things you own distributed.
But perhaps your assets or goals require something a bit more sophisticated. A qualified estate planning attorney can counsel you on the best estate planning tools to use to accomplish your goals for protecting assets for minor or special needs children; protecting adult children from themselves, that son-in-law or daughter-in-law you do not particularly care for; and if you are a business owner, legally protect your personal assets and business from loss due to being sued.
Remember that Wills, either simple or sophisticated, must go through a court process known as probate. Unlike states like California, Texas Probate is not terribly costly and was designed to be not too complicated; however, it can still take the better part of a year to complete, it is public, and provides a ready venue for anyone who wants to contest the Will.
Alternately, a revocable living trust can serve as a Will substitute, and in some cases may be a more appropriate planning tool. But, a trust is not for everyone. A revocable living trust is a private, flexible estate planning tool that holds and distributes your assets with little or no court intervention according to a set of terms outlined in the trust.
Everyone’s situation is different, but here are some of the ways you can structure your trust to protect your family. A revocable living trust could:
• Protect a spouse from losing the assets you’ve built together in a subsequent marriage/divorce;
• Protect children’s inheritance from many types of creditors;
• Give loved ones an incentive for doing things you consider worthwhile (finishing an education, remaining gainfully employed, staying away from drugs and other self-destructive behavior);
• Prevent a child from losing his/her inheritance in a divorce.
Estate planning is not just about what is going to happen to your “stuff” when you die. It is also largely about disability planning. Disability planning provides a plan for who will be in decision-making positions should you suffer a temporary or permanent change in health. Disability planning documents include: a durable power of attorney, a medical power of attorney, a directive to physicians (aka living will), a HIPAA release, a pre-need declaration of guardian. Disability planning also includes Medicaid planning and veterans benefits.
Perhaps you have already created a basic estate plan but changes in your family, assets or goals now require additional planning. A great way to start off the New Year, outside of your diet and exercise plan, is to do your estate plan now while you are motivated.
A qualified estate planning attorney can help you determine whether your estate plan still meets your needs and goals and can guide you in making the best decisions for your family. So, make your estate plan a reality this year. Call for an appointment.