For many of us, the New Year means an opportunity to start fresh and make resolutions for improvements over the next twelve months. You might resolve to drop those ten pounds that have crept on over the years or take more time to exercise, read, or cook. Clients often find their way to our firm in the first few weeks of the year, having undertaken one of the most important resolutions you can make for your family: finally sitting down to write or review your estate plan.
Many people do not realize that, without a will or other estate planning in place, a combination of state law and titling or beneficiary designations controls where their assets pass at their death. The statutory rules can result in unintended or undesirable consequences, particularly for people with blended families, unmarried couples who are in permanent, committed relationships, and people with estranged relatives.
Assets that pass by title or beneficiary designation also create special challenges. People often set up retirement accounts or life insurance on their first day of employment with a company and fail to update the beneficiary designations as their lives change. Contrary to what you might hope, the sibling or parent you named as your primary beneficiary ten years ago may not be eager to surrender the proceeds to your spouse and children who have since entered your life.
Administration concerns are another reason to create a purposeful estate plan, especially if your beneficiaries are not well suited to take on important legal and financial responsibilities (see our Choosing The Right Fiduciary series for more detail). And without an organized estate plan, beneficiaries and fiduciaries are often at a loss to compile information about your assets, a problem that has worsened with the advent of online banking and account management.
Even if you have a will or other estate planning in place, it may be time (or long past time) to give it a second look. Changes in your finances, family, and state or federal law may have rendered your existing plan obsolete. Now is an especially good time to review older estate plans because the recent tax act, which doubled the amount of estate tax exemption per individual, may warrant a simplification of the terms of your documents. And the fact that you have documents in place may not mean that your estate planning work is done, since coordinating titling and beneficiary designations on your existing or recently acquired assets can be just as important as drafting estate documents.
Creating and maintaining a thoughtful estate plan is a wonderful gift to your beneficiaries. A well-organized plan allows them to minimize time spent worrying (or outright panicking) and focus on processing their grief. We often find that clients who complete their estate plans find a welcome peace of mind themselves, as well. Taking action now, rather than carrying stress in the back of your mind about what will happen to your loved ones if you die, is the right course for you and them. Contact Schooley Law Firm today to get started and check a resolution off your list.