Can you believe that we’re already in June? 2021 is flying by and things appear to be looking up (at least, when compared to what happened in 2020—knock on wood). Now that half the year has passed, it is time to do a mid-year evaluation of your estate plan. This guide will provide a few simple questions for you to ask yourself when determining whether your estate plan covers everyone and everything it needs to cover.
1. Do I have a will?
A will is a final statement of your intentions when it comes to your assets. It determines where your assets will go after you pass on, and it is a vital step in the estate planning process. Dying without a will leads to intestacy, which will force your family into a painful and unexpected court process. Having a will as a cornerstone of an estate plan is extremely important.
2. Do I have a trust?
A trust is a three-party fiduciary relationship set up in a legal document. You, the donor, transfer title to a trustee, who holds the title until they are instructed to transfer title to the beneficiary. A trust is useful for someone who wants to and is able to pass on title to an asset immediately. A trust can also help you avoid probate court, which makes it an attractive option for many.
3. Do I have beneficiary designations?
There are a few possessions that can pass to heirs without you dictating them in the will (such as a 401[k]). Maintaining a beneficiary and contingent beneficiary—someone to take the account if the other beneficiary cannot—will allow the person you want to receive your assets without the court stepping in. Not naming a beneficiary to these assets means that a court will be left to decide the funds’ fate, and the court’s decision could run counter to your wishes.
4. Do I have a letter of intent?
This one is easy to complete, but it’s still vital. The letter of intent is a document that you leave to your executor. It defines what you want done with a particular asset or assets after you die or get sick. The letter of intent can also provide details on your funeral. It will also make a statement of your intent, which can help if there are murky parts of your will.
5. Do I have a healthcare power of attorney?
A healthcare power of attorney (POA) makes decisions for you if you’re too sick to make them yourself. This trusted person—usually a spouse or family member—will step in on your behalf, ensuring your wishes are followed. Though you might feel fine now, anything can happen.
6. Do I have a financial power of attorney?
Similar to a healthcare power of attorney, a financial POA makes monetary decisions for you in the event that you’re too sick to make them yourself. Again, even if sickness doesn’t seem like it’s looming on the horizon for you, it’s best to be prepared, just in case.
7. Is my business taken care of?
Some of us are business owners, and businesses must be included in estate plans as well. Having a succession plan and plan of action for your business after you die will keep your company from falling into disarray when you’re gone.
8. Do I have guardianship designations?
Those with minor kids should have guardianship designations, in the event that something happens to them and their spouse. Make sure to talk to your proposed guardian before you make the decision, as you want to ensure the guardian is on board before potentially saddling them with a huge responsibility.
9. Have I acquired any new major assets?
Estate plans change, and sometimes those changes are due to new assets that need to be incorporated into the plan. If you’ve acquired something major, you’ll need to include it in your estate plan, sooner than later.
10. Has anything major changed in my life?
This update applies to pretty much any major event in your life. If there are new births, deaths, or weddings, they need to be reflected in your estate plan.
These brief questions will put you on the right path to ensuring that your estate plan covers what it should cover. Visit our website to learn more and contact an estate planning attorney.