Eight simple Estate Planning review items for 2021

Eight simple Estate Planning review items for 2021

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What is Estate Planning?

Estate planning involves developing a strategy to deal with your assets and investments after you die. It aims to provide peace of mind for you and your loved ones, ensuring that your assets are passed on to your beneficiaries in the most simple and effective way.

What does estate planning involve?

A thorough estate plan might include:

  • Making a will, this is an official document that records the distribution of assets
  • Taking out life insurance
  • Naming an executor of your estate or trustee
  • Appointing power of attorney, or someone to conduct your affairs if you are unable to do so
  • Filing an advance medical directive, or instructions regarding medical treatment if you’re mentally incapacitated or unable to communicate

Steps to start estate planning?

 1. Take stock of your assets.

Create a list of all your personal assets, as well as other assets that form your estate, such as trusts, stocks or life insurance.

2. Identify risks.

 Identify any potential risks you want to plan around before and after your death, such as divorce, mental incapacity or your early death.

3. Create a plan.

Work with your lawyer, accountant and/or financial planner to work out an estate plan that is tailored to your needs and incorporates all your assets.

Estate Planning review Items for 2021

The end of the year is normally a time for people to reflect, to cherish memories and experiences, and to grow from the past. However, it is expedient to regularly review your estate plan.

1. Will the right people get my stuff?

First, make sure your will or trust correctly states who will inherit your assets. You should then review your pay-on-death (POD) beneficiaries on insurance policies, retirement accounts, and other assets. Do they match the beneficiaries in your will or trust? You should therefore coordinate your beneficiary designations with your will or trust to make sure all of your assets are distributed the way you want.

 2. Will the right people be in charge?

The representatives named in your estate planning documents are often given a great deal of power over you or your estate. You chose them for a reason when you originally signed the document. However, things can change, you should think about the personal circumstances or relationships of the people who will be in charge of you or your estate.

3. Should I get a living trust?

Wills and trusts are often misunderstood, while they can do similar things, they work in very different ways. The most notable difference between the two estate planning tools is that a will is subject to probate after your death, while a trust is not. That means your heirs must wait at least 6-12 months to receive their inheritance, and your estate will be drained by 6-12 months of expenses and there are court costs, filing fees, and a variety of other expenses, that cost must. So when you think about whether you should keep your will or upgrade to a living trust, remember the costs of not having a trust.

4. Have my relationships changed?

Whether or not you realize it, your estate plan is built around your relationships. Do you choose a stranger to inherit your estate or manage your finances if you are incapacitated? No, you choose someone you know and have a relationship with. However, relationships can change. It is important to consider how those changes impact your estate plan.

5. How old is my Durable Power of Attorney?

A durable power of attorney is one of the most important estate planning documents you can have and knowinf that a durable power of attorney does not “go bad.” It stays in effect until you either revoke it or you die makes you ok. Nevertheless, health care providers may not accept a power of attorney that is more than a few years old which is frustrating. To avoid issues, make sure your documents work when you need them to—you should consider updating your power of attorney every few years.

6. Is my trust fully funded?

A living trust is a great way to avoid probate. However, the fact that you have a piece of paper that says “living trust” on it does not mean too much by itself. A trust only avoids probate if it is fully funded. “Funding” a trust is the term for transferring assets into the trust, i.e., legally retitling and assigning assets into the name of the trust. This holds true for any other titled assets.

 7. Do I have an estate planning letter of instruction?

Settling an estate can be very difficult, even for “simple” estates. Your representative will have to inventory assets, contact your family and beneficiaries, organize and manage your finances, discover and address your debts, locate personal information, and do a hundred other things just to get started.

Get help

If you would like to learn more about estate planning, pls do contact our estate planning attorneys to assist you.

DISCLAIMER: The information provided in this blog is for informational purposes only and should not be considered legal advice. The content of this blog may not reflect the most current legal developments. No attorney-client relationship is formed by reading this blog or contacting Morgan Legal Group.

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