Studies show that 45 percent of Americans make New Year’s resolutions but almost two out of three of them don’t succeed with their resolutions. Where do you stand with your resolutions? No doubt a resolution to create or review your estate plan is not at the top of your list.
But estate planning is as important as resolutions to lose weight, spend time with family or be more frugal.
An estate plan provides various mechanisms to assure that your wishes are carried out when you are unable to take action or make decisions yourself. Estate planning provides the structure and authority to answer the following questions:
Who will care for my children? Your Will appoints a guardian for your minor children.
What happens to my assets at death? Many factors affect the disposition of assets at death. Beneficiary designations, transfer at death accounts, bequests in Wills and jointly held ownership each have different legal consequences. It is important to know how and to whom your property will be transferred at your death.
Who will be responsible to deal with my affairs when I am gone? The appointment of fiduciaries, including an executor or trustee is made in your Will. You should consider the selection of fiduciaries as one of the most important estate planning decisions you must make.
How should I prepare for disability? Several documents are critical in the event of disability. A health care proxy designates a person to make medical decisions on your behalf if you are unable to do so. A living will sets forth your end of life directives. A power of attorney appoints an agent to handle financial matters for you as needed.
How do I get started? As with many successful New Year’s resolutions you need to get organized. Before you call your estate planning attorney for an appointment be sure you have gathered some important information:
• Start with a list of your assets and liabilities with values as current as possible. For each asset indicate how it is titled — individual, joint, pay on death, in trust, etc.
• Obtain copies of all beneficiary designations for IRAs, pensions, life insurance or other death benefits.
• Make copies of important and relevant documents including prenuptial agreements, divorce decrees, adoption papers, recent tax returns and property deeds.
• Locate current estate planning documents, your Will, health care proxy, power of attorney and any trusts.
• Make an accurate list of your family members, their names, addresses, dates of birth and relationship to you.
• Make a list of any charities and individuals that you may want to include in your estate plans. Confirm that you have their correct legal names and addresses.
• For your tangible personal property (jewelry, furniture, treasures) make a list of specific items and the persons you want to receive each item at your death.
This organizing effort will streamline the work of your attorney in the development of your estate plan and the drafting of appropriate documents. It also gives you time to think about several crucial concepts in estate planning that may be of importance including protection of assets from your or your beneficiaries’ creditors, identification of beneficiaries, planning for disabilities, appointment of fiduciaries, beneficiary designations, including contingent beneficiaries, andreduction of estate taxes.
Whether your estate is simple or complex, it is important for you and your loved ones that it is well-planned. A thoughtful estate plan reduces the stress your loved ones experience on your death, saves money in the administration of your estate and, who knows, may even increase your longevity by motivating better habits.
Elizabeth A. Hartnett, Esq., CPA, joined Mackenzie Hughes in 2004 as a partner with an emphasis in wealth management services. Her many areas of expertise include estate planning. An active member of several professional associations, she is also vice chair of the Foundation of the Roman Catholic Diocese of Syracuse, Inc.