Estate Planning FAQ’s
Multigenerational Planning: Important Conversations to Have about Money
A: Whom you tell about your estate plan does not impact your ability to change your mind. Rather, it is the type of plan you create that will determine the possibility and difficulty of changing that plan. You can amend a revocable living trust or a last will and testament at any time up until you are incapacitated (unable to make decisions for yourself) or you die. On the other hand, there are irrevocable trusts that may be more complicated or problematic to modify in the event you change your mind.
Having an initial conversation with your family about your financial wishes can be nerve-wracking enough; meeting with them a second time to let them know you have changed your mind could be even more so, but it does not diminish the importance or the benefits of being open and honest with them. In general, we recommend that families hold an annual meeting to discuss the family wealth, just in case a change occurs, or if nothing more, to get together regularly and spend time together.
A: The answer to this question will depend on your unique situation and may take some soul-searching on your part. For some clients, it is crucial that they treat everyone in the same generation (children or grandchildren) equally to avoid family conflict after the client is gone. If this was the client’s parenting philosophy while raising their children, the client may consider it essential to ensure that each person receives equal access to the money and property after the client’s death.
Other clients believe that because everyone is different, the money and property left to the generations should be used to make sure that everyone has the same access to opportunities and advantages in life. One child may make more money than a sibling, or one grandchild may have special needs while the other grandchildren do not. The client may determine that someone who has paved their own way and is successful in their own right does not need as much as someone who is financially struggling.
It is important to remember that there is no right or wrong answer to this question. By considering your values and the type of legacy you want to provide to future generations, the answer will make itself known to you. We have walked many clients through the many available options to help them answer this question and craft a plan that matches their values, and we would love to do that for you as well.
Working with Clients Who Are Pursuing Assisted Reproductive Technology
A: From a financial perspective, now is a great time to start planning for your child. As you are probably aware, the ART process can be expensive. Having a proper financial plan can help alleviate some of the worries you may have during the process. Also, raising a child is expensive. You must consider the cost of food, clothing, shelter, toys, and education. Even if you or your partner are not expecting a child imminently, setting money aside or preparing a budget to accommodate these expenses can put you on the right financial path.
When it comes to addressing your child in your estate plan, such as who will be the child's guardian in the event something should happen to you, how much they will receive, and when they receive their inheritance, it is best to wait until the child is soon to be born. While your attorney can plan for a potential future child, the documents will be clearer if they plan for things as they are at the time of drafting. However, that does not mean that you cannot change your plan once the child is born. Having an estate plan prepared is not a one-and-done event. It needs to change and evolve as your and your family's circumstances change.
Planning with a Right of Occupancy Trust
Community Property Trusts
A: Community property trusts help married couples save money by reducing or even eliminating capital gains tax after the first spouse's death. This makes it easier for the surviving spouse to sell their inherited account or property without losing a significant portion of the sale's profits to taxation. This type of trust uses a longstanding tax benefit for community property, and, for the right person, can save much money.
A: In the estate planning world, the term “disabled” refers to an individual’s incapacity or the inability to manage day-to-day business affairs such as managing and protecting assets, signing papers, paying bills, and filing taxes. “Disability” or “incapacity” doesn’t mean you’re laid up on the couch with a bad back; instead, it means that you don’t have the physical and mental capacity necessary to manage your personal business.
A: A living will is used to avoid medical heroics such as life support at the end of life.
A: Your agent under your health care power of attorney has the power to make healthcare decisions for you if you are unable to make those decisions yourself.
A: Disability is the perfect example of why you need to appoint trusted helpers. If you have an up-to-date power of attorney, the named agent may be able to manage your finances, including paying your bills. Unfortunately, if you don’t have a legally documented disability/incapacity plan, your loved ones will battle it out in court and a judge will decide who’s in charge. Because power of attorney documents are often turned down, we use the belt and suspenders approach for many clients, including a trust with disability provisions.
TIP: Be sure to name a contingent agent in case your primary agent is unable or unwilling to serve. The same with disability trustees. Be sure to name successor disability trustees in case your named trustees are unable or unwilling to serve when the time comes.
Estate Planning for the Self-Employed
A: Depending on the nature of your business, you may have some options when you either no longer want to work or are no longer able to work. Maybe you will be able to sell some part of your business to an employee or competitor. This would supply you with cash to fund your retirement or provide for your family upon your passing. However, in order for this to happen, your business has to have something to sell.
If you are an independent contractor providing services, you may not have anything that can be sold when you are done working. If this is your situation, it is important that you are setting aside money to provide for your and your loved ones' futures.
Planning After Landing Your New Job
A: There are several options when it comes to naming a primary beneficiary for your life insurance policy.
First, you could choose to name just one adult. At your death, after providing the insurance company with your death certificate and completing any required forms, your chosen beneficiary will receive a check for the life insurance policy’s death benefit.
Second, you could choose to name multiple adults as the primary beneficiary along with the percentage or share that you want each to receive (not to exceed 100 percent or the total value of the death benefit). For example, you could designate 50 percent to Jack Jones and 50 percent to Jill Jones.
Third, you could name the trust as the primary beneficiary. At your death, the trustee of the trust will receive the check from the life insurance policy and will then manage and distribute the money according to the instructions you have left in the trust agreement.
Caution: It is not wise to name a minor child as the beneficiary of a life insurance policy. Because a minor is not a legal adult, the child is not allowed to manage the money on their own behalf. In the event a sum of money would need to be paid to a minor, the court may have to appoint someone as a guardian or conservator to manage the money on behalf of the child until the child reaches the age of majority (eighteen or twenty-one years of age depending on your state.)
A: Retirement accounts were created to give individuals the opportunity to set aside money from their wages, income tax-deferred, to fund their retirement. While the intent is that this money will be spent down over the course of your retirement, many people still have some money left in their account at death, and ultimately, this is what you want. The hope is that you do not spend all of your money in the retirement account before you pass away or else you will end up living on far less than you had budgeted for. Therefore, it is not only favorable but likely that there will be some money left in your retirement account at your death. And because everything you own at your death has to find a new home, a beneficiary designation gives you the opportunity to determine who will receive the remaining money.
Note: Depending on the type of retirement plan you are participating in and the rules in your state, you may be required to designate your spouse as the primary beneficiary, if your spouse survives you. In the event you want to leave the account to someone else, you may be required to get your spouse’s written consent.
If there is no money left in the retirement account, then the person you have named as the beneficiary will receive nothing. This is an important reason to keep an eye on your retirement account balance. If your intent is to leave a specific amount of money from your retirement account to a beneficiary, you should have a back up plan to fund this amount from another source in the event you spend through your retirement account
Proactive planning can prevent you from becoming a statistic of elder financial abuse. The first step is to make sure that, while you are mentally able, you put your wishes regarding the use of your money and property into a legally binding, written document such as a financial power of attorney, last will and testament, or revocable living trust. This way, should you lose the ability to manage your finances, your explicit wishes are already expressed in these valid documents, eliminating a loophole that someone could use to take advantage of you.
The second step is to make your wishes known to your loved ones, especially if you have decided to add someone to or leave someone out of your estate plan. By having an open conversation with your loved ones while you are alive and well, you can answer any questions and clear up any misunderstandings that they may have before it is too late. This includes updating your loved ones periodically if your wishes change. This will ensure that everyone is on the same page and can keep a watchful eye should suspicious changes occur down the line.
If you give money or property outright to a child, the money or property will automatically be theirs. This means it can be spent as the child wants, used for calculating and paying a divorce settlement, seized as part of a lawsuit, or stolen by a financial predator.
Alternatively, if you place the money and property you want your child to receive into a trust, you can protect it from some of these issues. First, you can determine how much and when your child will receive the money or property. This can allow you to spread the money and property over a period of time—for example, one-third at age forty, one-half at age forty-five, and the remainder at age fifty). This can also incentivize desirable behaviors, such as requiring that the child graduate from an accredited college or university to receive the money or property, or offer maximum protection by giving the trustee the absolute discretion as to when or if your child receives the money and property from the trust.
Updating Your Estate Plan After the Death of a Loved One
A: If the successor trustee of your revocable living trust (RLT) dies before you, nothing will happen immediately with respect to how your trust is managed. If you named a backup to your successor trustee in your trust document, it is important that you speak to that person and reconfirm that your chosen backup is willing to serve as your trustee when the time comes. Because this person was the backup to your successor, this person may have assumed that he or she would never actually have to act.
It is important to note that because the trust is revocable, you can name a new successor trustee-your backup does not necessarily have to move ahead in line. If you choose to revise your trust document, it is advisable that you name not only a successor trustee but also a backup to your successor trustee to ensure that there is always someone available to step in no matter what happens. As always, it is vital to discuss this selection with the person you have chosen before you finalize your documents to make sure that this person will act when the time comes.
If you pass away and no one is able to serve as trustee, your beneficiaries will need to look to your trust agreement for guidance to fill this vacancy. Your trust might provide that a certain number of your beneficiaries can appoint a new trustee without court involvement. Or your trust might require that the court approve any potential trustee. The outcome will depend upon the wording of your trust and your state’s laws.
A: As part of their estate planning, many parents choose to leave some or all of their accounts and property to their children. If your child passes away before you, you will want to review your last will and testament (also known as a will) and your RLT to see what you were planning to leave to your child. You will also want to check your other accounts and property to see if you named your child as a beneficiary or co-owner.
If your child was going to receive something, you need to check your will or RLT to see if these documents address who will receive the money and property if your child passes away before you. If you have already planned for this contingency, the next person in line will receive the accounts and property. Even if you have a plan in place, you should review the plan and your documents to ensure that they still reflect your wishes. A lot can happen in a few years, so it is always good to remind yourself of what your documents say. If your documents do not provide for a backup recipient, you need to update your documents to reflect who should receive these accounts and property.
You will also want to check any accounts or pieces of property you own to see if your child was named as a beneficiary through a beneficiary designation, transfer-on-death designation, or pay-on-death designation.
In addition to reviewing your estate planning documents to identify any money or property your child was going to inherit, you will also want to check your estate planning documents to see if you named your child as one of your trusted decision-makers (personal representative, co-trustee or successor trustee, agent under a financial power of attorney, or agent under a medical power of attorney). A vacancy in one of these important roles may require additional court involvement, which can cost your family time and money, as well as a loss of privacy.
A: You and your spouse probably owned some, if not all, of your accounts and property jointly. This may have been because you acquired the money and property during your marriage or because by owning the accounts or property jointly with rights of survivorship, you could avoid the probate process at the death of the first spouse. While you were able to avoid probate at the death of your spouse, you now own the accounts and property individually, and they will now be subject to probate at your death if you do not do any further estate planning. If avoiding probate is a priority for you, we can meet to discuss the various options available to you.
You will also want to review the beneficiary designations on your life insurance and retirement accounts. Most married individuals automatically list their spouse as the beneficiary because the intent is for the money to be used to continue the spouse’s current lifestyle. When considering other beneficiaries, the decision can be a little more complicated, which is why people sometimes avoid listing a contingent (backup) beneficiary. However, now that your spouse has passed away, you will need to confirm who is listed as the primary beneficiary and make sure that a contingent beneficiary is listed. We can help you walk through your options for leaving these accounts to other individuals and advise as to how they should be left.
Lastly, review your selections for your trusted decision-makers. Because of the close relationship you shared with your spouse, you likely named your spouse to serve in one or all of the following roles:
- personal representative under your last will and testament
- co-trustee or successor trustee of your RLT
- agent under your financial power of attorney
- agent under your medical power of attorney
Because your spouse is now deceased, you should review these documents and your selections to ensure that you have named a backup. You may also want to consider naming a backup for your backup.
If you have minor children, you will also need to consider who should serve as your children’s guardian if you are unable to care for them. If your spouse was the other legal parent, it is incredibly important that you name a guardian because your automatic backup is no longer alive.
Planning for Unmarried Partners
Preparing a Successor Trustee
A: As the term implies, a “trustee” is responsible for the accounts and property owned by the trust. Ownership by the trust occurs when the trustmaker changes ownership of the accounts and property from the trustmaker’s name individually to the name of the trust. However, there are several reasons why certain accounts or pieces of property may not be transferred to the trust.
During your lifetime, you continue to manage accounts or property outside of the trust and in your name only. If you are alive but unable to manage your own affairs, an agent under a financial power of attorney will have the authority to manage those accounts or pieces of property. If you do not have a financial power of attorney, your family may have to go to court and have a guardian or conservator appointed to manage your accounts and property.
At your death, some accounts or property that were in your name only may be subject to the court procedure known as probate. Probate is the court-supervised process of transferring accounts and property from a deceased individual to the appropriate heir or beneficiary. During this process, the court will officially appoint an executor or personal representative who was nominated in your will and give that individual or entity the authority to settle your affairs, manage your accounts and property, and distribute your accounts and property to the people you have named in your will. If you do not have a will, the court will appoint someone to act as executor or administrator based on state law. Your accounts and property will then be given to individuals-typically your parents, siblings, or other blood relatives-based on the state’s rules.
Alternatively, some of your accounts and property will not need to be managed at your death because ownership will transfer automatically. These include accounts or pieces of property owned jointly with right of survivorship and those with a valid beneficiary designation, pay-on-death designation, or transfer-on-death designation.
Estate Planning for LGBTQ Clients
A: One solution is to create a trust and title all of your accounts and property in the name of the trust. This will allow you to have access to and enjoyment of your money and property, as you can name yourself as both the current trustee and the current beneficiary. However, in the trust, you can designate what will happen to all of the accounts and property once you have passed, as well as who will be in charge of carrying out your wishes. Then, upon your death, the terms of the trust will be carried out and the accounts and property will be distributed to the named beneficiaries by the person you have selected, without court involvement.
In addition, if you are worried about your family contesting your wishes, memorializing them in a proper legal document such as a trust and will is critical. Be sure to express your concerns to your estate planning attorney who can discuss whether your state recognizes a “no-contest clause.” A no-contest clause can be included in your will and trust, creating a penalty for any beneficiary challenging your wishes and helping lessen the chances that a family member or beneficiary could legally challenge your estate plan.
A: Whether to get married is a personal decision. In addition to the emotions involved in making the decision, there could also be tax implications. Consider sitting down with an experienced estate planning attorney and an accountant or CPA to analyze the tax or financial impact this decision would have on your planning.
If you choose to remain unmarried, a properly executed estate plan will ensure that your partner is taken care of. A will or trust will allow you to designate the money and/or property that you want to go to your partner. A financial power of attorney will allow your partner to act on your behalf for financial matters and a medical power of attorney will allow your partner to make medical decisions for you if you are alive but not otherwise able. Additionally, if you have a retirement account or life insurance policy and would like those amounts to go to your partner, make sure that you have properly named them on the appropriate beneficiary designation forms.
Estate Planning for Singles
A: No. While you may not be 100 percent sure who should receive all of your money and property at the time of your first meeting with us, that should not discourage you from taking the next steps to have your estate plan prepared. Working together, we can discuss your ultimate goals for your money and property and craft a plan that addresses these wishes. In addition, should your life circumstances change, we can change the beneficiaries of your money and property in your will or revocable living trust.
Additionally, who gets your money and property is just one component of an estate plan. An estate plan also provides instructions regarding your medical wishes and appoints individuals to make financial and medical decisions for you in the event you cannot make or communicate them yourself. If you are having trouble determining who will make decisions for you, we can help walk you through the decision-making process. And just as for the recipient of your money and property, you can change the individuals you have named as your trusted decision makers as long as you are mentally able to.
A: If you do not proactively create your own personal estate plan, the state will use its default plan, known as the state's intestacy laws, to determine who will receive your money and property, as well as how much money and property those individuals will receive and how. Any money and property an individual receives will be given to them outright (all at once). The only exception to this is if the money or property is to be distributed to a minor (someone who is not yet eighteen or twenty-one years old, depending on your state law). In that case, the money and property will be held by a court-appointed conservator or guardian, and the child will receive everything once they are no longer a minor.
If you are still alive but need someone to make medical or financial decisions for you and you did not complete your own estate plan, a judge will select someone, often a family member, to make the decisions for you. This is a time-consuming, expensive, and public process that can create additional stress for you and your loved ones during a time of potential crisis.
Relying on the state's plan and leaving your family to figure out what you would have wanted can lead to disagreements among family members and the possibility of your hard-earned money and property being used to pay legal fees and court costs instead of benefitting your loved ones or causes you care about. It may also take longer to wrap up your affairs, which could cost more.
Estate Planning for Single Parents
The answer to this question depends on your unique circumstances and the needs of your minor children. However, at a minimum, it is a good idea to place any money or property you want your minor children to inherit in a trust. This will allow you to control who manages the money and property on your children's behalf and when they will have access to it.
A trust can be created during your lifetime (called a revocable trust) or at your death (via a testamentary trust that is part of your last will and testament). The biggest difference between these two options is when the trust becomes effective. If you create a revocable trust during your lifetime, it will be for your benefit, and you can include instructions for what happens to the money and property at your death. A properly drafted and funded trust can be managed without court involvement and can be kept more private. On the other hand, if you use a testamentary trust under your last will and testament, you can still direct what will happen to your money and property, but the document will need to be filed with the probate court, and the trust will not be created until you pass away. This means that none of the instructions in the document will have any effect until you die. By contrast, a revocable trust can include provisions for what to do if you are alive but unable to care for yourself or your minor children.
When crafting instructions for how your children's inheritance should be managed and distributed, you have a variety of options. For example, your minor children could receive a percentage upon reaching a specific age (e.g., 50 percent at thirty years old and the remainder at fifty years old). You could also structure your children's trusts as incentive trusts to allow the trustee to give your children money only after they meet certain goals (e.g., successfully completing postsecondary education, being sober for one year, etc.). Alternatively, you can leave the decision of how and when to distribute the funds exclusively to the trustee's discretion. This is sometimes referred to as a discretionary trust. Because your children will not be guaranteed a specific amount of money or piece of property, the funds will be better protected from any future creditors or divorcing spouses your children may have. However, when deciding to use a discretionary trust, it is important to choose your trustee wisely and communicate potential factors for the trustee to consider when giving money and property to your minor children.
Estate Planning for Military Families
A: While you do have some legal services at your disposal because of your military service, sometimes the basic estate planning offered by your JAG office is not enough to carry out your specific wishes and truly protect your family. By working with an experienced estate planning attorney, we can help ensure that your individual situation is evaluated and a custom plan is crafted and implemented to meet your needs.
A: Although $400,000 seems like a lot of money, it can be depleted quickly. Depending on your unique situation, your family may need more than that. Are you married? Do you have children? The cost of raising a child to age 18 is approximately $250,000, so that life insurance could be eaten up quickly. Will your family need to move if you pass away? Does your spouse currently work, and will he or she need to return to work and then find child care? The passing of a loved one can throw a family into financial turmoil. With the proper planning, it is better to leave your family with more resources, appropriately protected, than too few.
Estate Planning for First Responders
A: We understand that schedules can be busy. However, if we will be planning for both of you, we must meet with both of you. We have an ethical obligation to ensure that any strategies we put in place regarding your spouse's money and property are what your spouse actually wants. In most cases, we can only guarantee that by meeting with both of you. Also, because you will more than likely have jointly owned accounts or property, we need to ensure that both of you agree on what will happen to those accounts and pieces of property at the death of the first of you and then at the survivor's death. Because we would be representing both of you, we strive to create an open and honest environment for your joint planning. To do this, both of you need to be present for all discussions.
We understand that you may have a unique situation; accordingly, we may be able to accommodate you and your spouse by meeting virtually for some parts of the estate planning process. Let us know how we can best accommodate your busy schedules.
Estate Planning for Blended Families
Estate Planning for Community Property Trust
Divorce and Estate Planning
Estate Planning for Newlyweds
Expecting an Inheritance
Why You Want to Avoid Probate
A: Disability is the perfect example of why you need to appoint trusted helpers. If you have an up-to-date power of attorney, the named agent may be able to manage your finances, including paying your bills. Unfortunately, if you don't have a legally documented disability/incapacity plan, your loved ones will battle it out in court and a judge will decide who's in charge. Because power of attorney documents are often turned down, we use the belt and suspenders approach for many clients, including a trust with disability provisions.
TIP: Be sure to name a contingent agent in case your primary agent is unable or unwilling to serve. The same with disability trustees. Be sure to name successor disability trustees in case your named trustees are unable or unwilling to serve when the time comes.
A: To make sure that your trusted decision maker can access your cryptocurrency when the time comes, this individual (or group of individuals) needs to know what type of cryptocurrency you own. It is incredibly helpful if you can keep an up-to-date ledger of your holdings so your decision maker knows what to look for.
Next, you need to let your decision maker know how the keys are held. What type of wallet do you use? Do you use different types of wallets for different cryptocurrencies? You also need to let your decision maker know how to access the keys to the wallet or password for an account if you have your cryptocurrency stored on a third-party exchange.
Lastly, it is important that you let your loved ones know what your wishes are for your cryptocurrency. It is only by expressing your wishes in a legally binding document that we can help ensure that your plan will be carried out the way you want.
A: Although there are many different options available to you when it comes to creating a plan for your cryptocurrency, working with an experienced estate planning attorney can help ensure that you have the right plan. First, it is important that you choose the right people to make decisions for you if you cannot make them for yourself or if you pass away. Because your estate plan will include managing cryptocurrency, it is important that your chosen financial decision maker be able to understand and confidently manage your cryptocurrency according to your wishes. This might require you to choose a person who is familiar with cryptocurrency instead of just a close friend.
Another reason for working with an experienced estate planning attorney is to ensure that your estate planning documents are prepared properly to carry out your goals and objectives for your cryptocurrency. Because cryptocurrency is new and volatile, some states may take the position that it is an unwise investment. The court may require that your trusted financial decision maker liquidate the cryptocurrency and invest it in something safer. This may not align with your wishes for your cryptocurrency. Therefore, if you want a trustee to hold on to the cryptocurrency and invest it on behalf of your loved ones or if you want to give your cryptocurrency to a named individual, you need to have your wishes written down in a legally enforceable document that contains the correct provisions to prevent its premature sale.
A: When leaving your minor child with a trusted person, the person must have the authority to fully care for your child while you are away. This includes seeking medical treatment, signing school permission slips, etc. Choosing a person to watch over your child does not automatically give that person the requisite authority to carry out their duties. Most states have a legal document, the name of which varies by state, that you can complete to name someone as a temporary guardian of your minor child. This official document shows that you have delegated to them the authority to care for and make decisions for your child. It is important to remember that this document is only effective for a specific period of time (six months to one year, depending on your state's law), so you may need to sign a new document before the current document expires. It is also important to note that, although this document allows you to delegate the responsibility to care for your child, it does not mean that you are no longer able to care for your child. The authority you delegate is in addition to your legal rights to care for your minor child-the person you choose is a backup.
Further, if you are going to be traveling, especially without your minor child, it is essential that you have proper estate planning documents and that they are up to date. A last will and testament is an important component of a comprehensive estate plan, because this document can be used to nominate a guardian for your minor child at your death if the other legal parent is unable to care for the minor child. However, a last will and testament only becomes effective at your death.
In some states, you may name a person to be your minor child's guardian in a separate writing that is referenced in your last will and testament. One benefit to this approach is that you do not have to update your last will and testament if you only want to change the minor child's guardian. This document could be used to let a court know your choice for a guardian if you are alive but unable to care for your child and the other legal parent is also unable to care for the child.
A: In addition to the typical tasks you may do before your trip such as stopping the mail delivery and adjusting your home's thermostat, you should be sure to take care of the following:
- Meet with an experienced estate planning attorney to create an estate plan or update an existing estate plan
- Legally appoint someone to handle your financial matters while you are away
- Research how to name a medical decision maker in the country you will be visiting if you will stay in that location for a significant period
- Contact your health insurance company to see if they will cover you while you are traveling in another country
- Research and decide whether travel insurance is necessary or advisable for your trip
- Review any existing life insurance policies to make sure that the beneficiaries are properly named and that the activities you take part in during your trip (i.e., bungee jumping, rock climbing) will not void coverage
- Apply for or renew your and your child's passport
- Have the proper documentation prepared to legally give someone the ability to make decisions for your child while you are away
Planning for the Recently Retired
A: With retirement comes a new chapter in life. To make sure that you have enough money to survive, you have most likely inventoried everything you own and your sources of income. By doing this prep work, you have actually taken a large step forward in the estate planning process. Knowing what you own makes it easier to plan for the use and management of your money and property during your lifetime and after your death. You can also plan for someone else to manage your money and property for you during your lifetime if you are unable to.
A: Having a properly executed and legally binding estate plan is a great first step in making sure that you and your loved ones are cared for. However, it is important to remember that estate planning is not a one-and-done event. You should review your plan every year or so, especially after major life events such as retirement. When looking at your existing plan, the following are some important questions to ask yourself.
- Do you still own the same property or have the same account balances as when your plan was first created? What will the balances be at your death? Chances are you put money into investment or retirement accounts during your working years to prepare for this next chapter. While you may have a lot of money today, you need to be aware that the amount of money you have will decrease when you withdraw from those accounts.
- Does your plan assume your children or other young beneficiaries are still minors? The birth of a child usually prompts parents to create an estate plan. However, once it has been drafted, many parents continue living their lives without thinking about their estate plan. If it has been some time since you created your estate plan, your once-minor child may now be an adult or approaching adulthood soon. Your focus may no longer be on choosing the right guardian but instead on making sure your adult child’s needs are properly addressed in your documents.
- Does your plan rely on proceeds from an employer-provided life insurance policy? Many employers offer life insurance as part of an employment package. However, you may no longer have this policy when you stop working. If you were relying on these proceeds to provide for your loved ones at death, you will need to explore other options.
- Do you want to change how much your beneficiaries inherit and how they receive their inheritance? Now that some time has passed, are the amounts of money and property and the ways in which they are to be distributed still appropriate? For example, did your will or trust provide that $300,000 be held in a trust for your only child’s benefit and then distributed to your child when they turned thirty-five? Is it now likely that you will have less than $300,000 at your death? If so, what other wishes will you have to sacrifice to give your child $300,000? Also, if your child is now thirty-five years old or older, any money and property will go to them automatically based on the provisions in your documents. Are you still okay with that? Now that your child is older and you have a better understanding of their needs and abilities, you may want to consider changing how they receive money and property. They may require more than you had originally planned, or perhaps they are successful enough that they no longer need to inherit from you.