CAN YOUR FAMILY RISK ANOTHER DAY WITHOUT AN ESTATE PLAN?
The following ten steps should be considered by everyone starting to plan their estate. It is also a good review for those who have already planned their estate.
1. Lists Make a list of all assets and associated their values so that an attorney can determine the net value of your estate.
2. Special Needs Every family has special needs. It is important that you plan for special needs in your estate plan. Special needs include planning for children on government benefits, children with drug and alcohol addictions, and children who are unable to manage money. Estate plans deal with all of these issues in different ways. Often the distributions are stretched out over a long period of time to make sure the estate is not wasted. Special needs should be addressed with love and understanding.
3. Naming Trustees and Personal Representatives Personal representatives and trustees should be carefully selected. It is a job that deals with people skills and money management. You and your attorney should discuss this in great detail. Sometimes a corporate trustee is your best choice.
4. Tax Issues Discuss all federal and state tax issues with your attorney so that you have a full understanding of all possible costs involved with your estate.
5. Marital Rights If you do not have a pre or post marital agreement-you might be in for a surprise. Your spouse has certain marital rights and could contest your will or trust and be awarded assets. Discuss fully what these rights are and take steps to do a post marital agreement if possible problems exist.
6. Asset Protection It is important to know what assets are exempt from creditors while you are living to insure assets will be left in your estate. Your attorney should be able to discuss and give you a list. Often you can get an umbrella insurance policy to give you added protection from automobile accident claims ... and umbrella policies are cheap.
7. Review Retirement Accounts and Insurance Products Review all your retirement accounts and insurance products to make sure the beneficiaries are consistent with your estate planning objectives. For example - if your estate plan has stretch provisions-make sure you do not have outright beneficiaries named. The beneficiary should be a trust in some plans.
8. Corporations and Small Business Plans It is important to have great detail in what happens to a business upon the death of a major owner. Often the estate plan should nominate a committee to make major decisions on what happens to the business. The more information shared with the person who will take over, the better chance that the business will survive.
9.Guardianship Plan to avoid being declared incompetent if you have a stroke or accident. Update your power of attorney every two or three years and consider a living trust. Both of these documents will help avoid guardianship.
10.Drafts Ask the attorney to send you a draft of your documents. Review the documents considering the above steps.
Remember unless you want your estate plan to kick on right away. When you drink don't get behind the wheel and be involved in an auto accident (whether it is your fault or not) or get arrested for a DUI ... I don't need the extra business ... and you do not want your estate planning to take affect NOW.