Each year, I make a list of goals that I want to accomplish for the year. Some years, the goals have a theme – unfortunately, the theme is almost always the same: lose weight, exercise more…
This year, I’m challenging you to make one of your New Year’s goals to get your estate planning affairs in order. This is one goal that is easy to accomplish – I promise!
Here are 5 easy steps you can take to accomplish this goal.
- Get educated about estate planning. Attend an estate planning workshop or two. Estate planning attorneys like me are always giving seminars and workshops to educate people about estate planning. Yes, these workshops help attorneys attract clients, but the goal of these workshops is really to educate people about the basics of estate planning so clients can have meaningful conversations and can make thoughtful decisions about their own estates.
- Review your old documents. Do you have a will or trust? Advanced Directives or Healthcare Powers of Attorney and Living Wills? Do you have a Durable Financial Power of Attorney? How old are your documents? If your wills name guardians for your children who are now 30 years old, your documents are definitely out of date. Did you name an executor who is now dead or is your ex-wife named as your executor? Probably time to revise your will.
What about your health care documents? If they were done in Georgia before 2007, you may want to update them to the Advance Health Care Directive that went into effect in 2007. Who have you named to make healthcare decisions for you? Is that person still the right person to make decisions for you?
- Look at the ownership of all of your accounts. How is your bank account titled? Title indicates who owns the account. Are you the sole owner or is it a joint account? Who is the joint owner and is this someone who should be a joint owner of your account? Here’s a link to a blog I wrote last year about the pros and cons of joint ownership of accounts: Should I Add My Daughter to My Account?
- Check the beneficiary designations of your accounts. The beneficiary is the person who would receive the proceeds of the account at your death. Is the beneficiary your estate? If so, why did you make your estate the beneficiary? Having your estate as the beneficiary pretty much ensures that your estate will have to be probated. Is your beneficiary under the age of 18 or someone with special needs? It may not be the best thing to give someone under the age of 18 a large inheritance. Although the court will put protections in place for those under 18, those protections can be expensive and once the beneficiary has their 18th birthday, the money is all theirs – to spend however they wish. Yikes!
If the beneficiary has special needs, a gift may mean they lose governmental benefits.
Distributions from IRA’s and 401(k)’s have income tax consequences, so have you considered how your beneficiary designations will affect the tax liability of your beneficiaries?
- Make an appointment with an estate planning lawyer, a CPA and your financial advisor. A good, comprehensive plan involves a group of professionals who can guide and counsel you in making decisions about your estate.
Will you accept the challenge to make getting your New Year’s Goal getting your affairs in order?
Here's to a great new year!