Next week is National Estate Planning Awareness Week. This week was designated by Congress in 2008 as a means to educate, and to remind, U.S. citizens about estate planning. In reality, its purpose is to encourage people to take the necessary steps so that surviving loved ones don’t end up with a complicated mess to clean up. With proper planning, your estate planning attorney, financial advisors and tax professionals can assist you in managing, and ideally eliminating, the post-death time and tax burden on your beneficiaries.
It may surprise some that even the young adults in your family should have a written estate plan. That plan should at least include a durable power of attorney and a patient advocate designation, both of which name decision-makers who can assist with financial management or medical decisions in the event these young adults need additional help managing their financial or medical affairs or become temporarily or permanently incapacitated during their lifetime.
Further, an estate plan should also include a will that appoints someone to manage the collection and distribution of assets upon death and the payment of any last debts and bills. For families with children, a will should also appoint a guardian to care for any minors. Additionally, a trust is often necessary for individuals and families who have significant assets, young beneficiaries or a variety of unique family situations. Proper planning is especially important for blended families where married parents have children from previous relationships, in order to avoid disinheriting these children.
For those 33% of Americans who have fully completed an estate plan, I commend you for providing such a thoughtful gift to your families. However, if your plan is more than five years old, it is probably time for a review with your estate planning attorney to determine:
- Do my beneficiary designations on my financial accounts and life insurance match my estate plan?
- Are my planning documents all together in a secure place that my beneficiaries have access to?
- Are my named fiduciaries still the right choices to be my decision makers?
- Have there been any significant changes to my assets (such as buying or selling property in another state or country)?
- Are updates needed to my plan and to my named beneficiaries due to family events (like marriages, births, divorces or deaths)?
- Am I taking full advantage of the temporary increase in the estate, gift and generation-skipping tax exemptions, knowing that the high exemption amounts are currently set to decrease at the end of 2025?
- Does my plan include the charitable giving that is important to me?
National Estate Planning Awareness Week is a reminder for everyone over the age of 18 that creating comprehensive estate planning documents, and keeping them up to date, spares your family a lot of headaches and stress during a difficult time of grief. Contact your Warner attorney or Nina Lucido at nlucido@wnj.com or 586.303.4120 if you or someone in your family needs to create or update estate planning documents.
