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Ten Estate Planning Essentials


While most people acknowledge the need for a complete estate plan in order to ensure that their loved ones are taken care of in the event of their death or disability, not everyone knows what is required to have a “complete” plan. Here is a list of 10 “essentials” that should be considered as part of the planning for every estate:

  1. Last Will and Testament and Revocable Trust. When most people think of having a “complete estate plan”, the Will is the document that likely comes to mind. There is good reason for that. If you die without a Will, some or all of your assets will be distributed under the intestacy laws of the state in which you reside at your death and this may or may not correspond with your desires. A Will can also avoid personal and administrative difficulties since it enables you to appoint a personal representative to handle your estate and a guardian to be responsible for your minor children, rather than relying on the court to appoint these positions. Many people also choose to use a revocable trust as part of their estate plan. A revocable trust is created during your lifetime and provides for yourself and your family both before and after your death. There are a number of advantages to the revocable trust, including flexibility, confidentiality, ease of management and distribution of assets, and the avoidance of probate. The revocable trust is not a will substitute but may be a potentially valuable tool to be used in conjunction with your Will.
  2. Beneficiary Designations and Property Title. Certain assets pass at your death by operation of law and are not controlled by your Will or by the intestacy laws. These assets include real estate held with another with right of survivorship, financial accounts held with another with right of survivorship, and assets that pass by beneficiary designation, such as life insurance and retirement benefits, that name someone other than your estate as beneficiary. All other personal and real property that you own in your sole name at your death will pass either under your Will, or if you do not have a Will, by intestacy. A complete estate plan involves a review, and possible revision, of your beneficiary designations and titled property to ensure that they comport with your overall estate planning goals.
  3. Durable Financial Power of Attorney. While not technically an estate planning document since it is effective only while you are living rather than at death, this document is an invaluable tool in preparing for the possibility of your physical or mental disability since it allows you to name an agent who can act on your behalf in the event that you are incapacitated or are otherwise unable to attend to your financial and business matters. The designated agent can be an individual (such as a relative or friend) or a financial institution, such as a bank or trust company. As this appointment involves giving an agent the same financial powers that you possess, choose your agent, and successor agents, wisely.
  4. Health Care Power of Attorney. Similar to the financial power of attorney, this document allows you to appoint an agent who is an individual to make your health care decisions in the event that you are unable to make them for yourself. Again, typically this health care agent is a relative or friend. This document also allows you to name an agent to receive medical information which has become increasingly difficult as recent laws have been enacted to ensure patient privacy.
  5. Declaration of a Desire for Natural Death. More commonly known as a “living will”, this document expresses your desires with respect to certain treatments to prolong your life in the event you have a terminal disease or illness or are in a persistent vegetative state. A “living will” allows you to authorize the withholding of extraordinary medical means such as artificial nutrition and hydration, if you are in either of these medical states.
  6. Standby Guardian Appointment. The guardian provisions in your Will only take affect upon your death. This document allows you to name a guardian for your minor children in the event that you are incapacitated or otherwise unable to care for your children during your lifetime.
  7. Regular Review of Estate Plan. Things change in life, and part of any good estate plan is ensuring that it accurately reflects your current personal and financial situation, not to mention the current state of the estate tax and estate and trust administration laws. You should therefore review your estate plan at least every three to five years or sooner in the event of a major change in circumstances (birth of a child, financial windfall, change in the tax laws, etc.).
  8. Accessible Information. Having a complete estate plan ensures that your loved ones will be taken care of from a legal perspective. On the practical side, you can help avoid potential delay and difficulty in the handling of your financial affairs by providing them with vital information in the event that something should happen to you. You should make sure that your closest family members and personal representative either know, or have easy access to, certain important information, including, but not limited to, the location of your Will and estate planning documents, other important papers, medical information, social security number, safety deposit box location, password information, financial account information and contact information for notification purposes.
  9. Additional Considerations. Do you have a large estate that may be subject to estate taxation? Do you have a family business and need a succession plan? Do you have a beneficiary with special needs? Do you have a beneficiary who should not receive his or her inheritance outright? All of these questions and more should be considered and planned for in a complete estate plan. In short, give serious thought to your circumstances and identify any areas of particular concern to you and these things should be addressed by your estate planning.
  10. Communicate. At first glance, this may seem an odd choice to include as part of your estate plan but communication with your family prior to your death or disability can save much hardship later on. This is especially true in situations in which family members are not being treated similarly under your estate plan. Although there are times when surprises are appreciated, dealing with the death of a loved one is generally not one of them. Taking the time to communicate with your family prior to your death or disability will help to ensure that your plans are carried out as efficiently as possible and can often help to avoid hurt feelings in the process.

Obviously, this is not an exhaustive list of the things that need to be in every estate plan, but is instead meant to get you thinking about the types of questions that should be addressed. Once you have thought about each of the steps indicated here and have acted accordingly, you will be well on your way to having completed your estate planning.

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