I was reading a magazine article entitled “Make a New Year’s Resolution to Give Your Estate Plan a Checkup” by Deborah L. Jacobs, and I was reminded about how much people dislike going to see their estate planning attorney (I think we’re right up there with dentists, probably higher). One may wonder what is the point of planning ahead, and I’d like to give you my top five reasons why it is important.
- You may not have a huge estate, and therefore, may not think that having a Will or trust is important. However, estate planning is more than that – it’s planning for incapacity, as well. What if something happens and you cannot make legal or financial decisions? Have you appointed someone to do that for you? What if this is a second marriage – will your new spouse and your children from the prior marriage fight over who controls things if you become incapacitated? Have you named someone to be your healthcare surrogate to make medical decisions for you? Do you have a living will that specifies whether you wish to be kept alive by artificial means? A durable power of attorney, living will and health care surrogate designation are important for people of any age from the time someone becomes an adult at the age of 18 and older.
- If you have even a modest estate, you may find it desirable that your assets do not pass through probate at your death. A Will cannot help you to avoid probate – it tells the Court who you want to administer your estate, and who you want to have your assets. A Will also becomes public record. A revocable living trust, on the other hand, is private and can help you avoid probate. Not everyone needs to have a revocable living trust and there may be easier ways to avoid probate. Other ways to avoid probate include having beneficiary designations on assets (such as life insurance and retirement accounts), making bank accounts payable on death, or even owning assets jointly with another. It is important to speak with an attorney to help you determine what is in your best interest because not all circumstances are the same.
- Has it been five or ten years since you last had your estate planning reviewed? Just like you go to a doctor to have your physical check-up, you should also have a review of your estate plan (thankfully, not as often as having to go to the doctor). I usually tell clients that it is advisable to have a review of your estate planning documents every 3 to 5 years, and whenever you have a major life change (marriage, baby, divorce, death) of someone who is part of your estate plan. For example, I have a client who does not have any children and wished to leave all her assets to her niece. All of her estate planning documents list her niece as the beneficiary, her agent under her durable power of attorney and her healthcare surrogate. She recently had a falling out with her niece and called to tell me that she wants to remove her niece from her estate plan completely. She was concerned because she is having health issues and did not want to wait too long, in case something happens to her.
- If you have a minor child, planning ahead is especially important. I had someone call me the other day to say that the father of her children had passed away leaving the minor children as beneficiaries of a $100,000 life insurance policy. In Florida, if a minor child inherits more than $15,000, a guardianship must be established over the property of the child. This means court involvement, attorneys fees and costs, and the child receiving the money when they turn 18 years old. If only the father had planned ahead, he would have avoided having a court decide when and how his children will be able to use the money from the insurance policy.
- By the same token, if you have a child with a disability, planning is important for two reasons. First, your own estate planning should be done so that, if something happens to you, a special needs trust can be set up for your child so that someone can manage the money to care for them and so that the child does not lose any government benefits if they inherit money from you. Second, when your disabled child turns 18, you lose the ability to make all decisions for them (financial, educational, health care). Therefore, you need to either have a Durable Power of Attorney and Health Care Surrogate designation for the adult disabled child, or you need to look into becoming their guardian advocate.
These are just a couple of the reasons why adding “estate planning” to your New Year’s resolution list. If you do not have an estate plan, why not make 2017 the year to accomplish this personal planning goal? We are here to assist you. Please contact us or call the office at 813-438-8503 to schedule a complimentary phone consultation with one of our knowledgeable attorneys.