3rd Quarter 2022

When most people think of estate planning, usually writing out their will comes to mind. While a will can help you accomplish a number of important planning goals, it’s certainly not a complete plan to protect your future.

Many people know that a will allows you to control how your assets are distributed after you pass away. And, that without a will, your assets would simply be distributed in an action carried out by the state. Known as intestate succession, the state acts in an objective, and simply procedural, manner because your assets are required to be distributed. The process of intestate succession will completely ignore your wishes because what you “would have wanted” is simply irrelevant to the state without a formal will in place.

A will is also critical when you have minor children. The terms of your will can give you control over how your minor children are raised should you and your spouse pass away. In your will, you can name a trusted person to serve as a guardian, someone who will raise and care for your children when you cannot. However, without a will, a court decides who will raise your children; a decision that may appoint a person you never would have selected yourself.

In sum, yes, a will is an important document to create so you can rest assured your wishes will be respected after you’ve passed away. Yet, it’s important to consider the limitations of a will as well. For instance, your will does not allow you to manage your affairs should you become incapacitated.

Working with an experienced estate planning attorney to establish a durable power of attorney and advanced medical directive will ensure that you retain some control over what is done on your behalf if you become incapacitated. Each of these documents empowers one or more individuals to make decisions about your assets or medical care when you are unable. If you do not have either document in place, a court will decide who to appoint to fill these roles for you. Again, leaving the decision open for the court to decide could lead to the appointment of someone you would not have chosen for yourself; someone who would then have the power to take actions they believe are in your best interest regardless of your personal preferences.

Further, many financial accounts require a beneficiary designation, instead of a will, to determine how the assets will be distributed. Ownership of assets such as life insurance, annuities, retirement accounts like IRAs and 401(k)s, and jointly-owned property all look to the beneficiary designation form for guidance on how the asset is to be distributed after the owner’s passing. In fact, many IRS rulings and court cases have concluded that the owner’s statements and intent in his or her will do not matter if they contradict what was written on the beneficiary designation form. This is why it’s important to also review your beneficiary designations periodically to ensure they reflect your wishes now, and not what you wanted when, for example, you opened the IRA 20 years ago.

A trust is another estate planning tool families can utilize to provide a greater level of flexibility in how their future is managed. For example, a revocable living trust allows your estate to avoid probate entirely—and the public scrutiny that accompanies it. Trusts can also protect your assets against creditors and other threats while protecting your heirs’ inheritances against creditors, predators, remarriage, and even their own poor decisions if they are not yet mature enough to handle an inheritance on their own.

In short, while a will can help you accomplish important goals, additional estate planning tools and strategies are available to protect you and your loved ones both after you pass away and in the event of tragedy while you are still alive. An experienced estate planning attorney can help you determine the best tools and strategy for you.

For many, an estate plan is created and never looked over again – until it’s necessary to do so. But did you know that you should really look at your estate plan as something that grows and changes with you?

Think about what has happened in your life since the last time you looked over your estate plan. Maybe you bought a new home, got married, or welcomed your second child. Each of these events demonstrates exactly why keeping your plan up to date is just as important as creating a well-designed plan in the first place – because life is full of beautiful changes.

And life will continue to offer these changes, especially as you grow older. Your health, financial situation, income, and the overall value of your assets continuously change with you and over time. Plus, the needs of your loved ones will change over time as well. After all, people get divorced, remarry, have children, buy and sell homes, start a business, change jobs, and sometimes they suffer unforeseen financial difficulties like bankruptcy or personal problems like alcoholism.

By having an established schedule to review, and, if necessary, revise your estate plan on a regular basis you’ll be able to account for every change life brings your way, and better protect both you and your loved ones in the process. But, if you believe any recent life events may have impacted your estate plan’s effectiveness, we urge you to have your plan reviewed immediately.

On top of that, the law is constantly changing. Over the years, new laws may take effect and others may be repealed which could make some options for protecting assets less attractive than they were previously or offer new opportunities for wealth preservation and growth. Working with a knowledgeable estate planning attorney as you update your estate plan will ensure you have a strategy in place that will take advantage of every legislative update.

So, whether or not you and your loved ones have experienced any recent life changes, it’s best to have your plan reviewed at least every two years to make sure your existing strategy takes into account any changes to the law, tax code, or financial landscape. It’s a great feeling to know you have thoughtfully prepared for your and your loved ones’ future financial, physical, and emotional well-being with your estate plan. Now, it’s simply a matter of keeping your plan up to date so that the same level of carefully considered protection lasts for years to come.