Coming into a new year, we are reminded of our opportunity for new beginnings.
Many choose this time to start a new health plan or set a new financial goal, but this year we would like to encourage you to start your year by thinking about what you will leave your loved ones in the end.
Far too often, people fail to create an estate plan not because they do not have belongings that they would like to pass on or because they do not care who would receive them, but simply because they fail to sit down with a trusted estate planning attorney and create one.
As the waning days of 2018 remind us, all things must come to an end. Yet, unlike the calendar, our days are uncertain.
Creating an estate plan can be as easy as writing a will. A will sets out who you are, who will be in charge of settling your estate when you pass away, and how you want your assets distributed. A will should revoke any prior wills you have created and set guardians for your minor children, if any.
Depending on your particular situation you may need a more sophisticated will or other estate planning tools. A qualified estate planning attorney can help you determine what best fits your needs.
A more sophisticated will can be used to shepherd assets for minor children, to minimize estate taxes, and to provide for more structured distribution of assets to your beneficiaries according to your specific instructions.
Alternately, a revocable living trust can serve as a will substitute. A revocable living trust is a private, flexible estate planning tool that holds and distributes your assets with little or no court intervention according to a set of terms outlined in the trust.
A revocable living trust could be structured to:
•protect your spouse’s inheritance in a subsequent marriage/divorce
•protect your children’s inheritance from creditors
•give loved ones an incentive for doing things you consider worthwhile (finishing an education, staying employed, avoiding drugs and other self-destructive behavior)
•prevent a child from losing his/her inheritance in a divorce
After reviewing your specific circumstances, a knowledgeable estate planning attorney may recommend one or more kinds of trusts. In addition to a revocable living trust, these could include a Life Insurance Trust, Qualified Personal Residence Trust, Charitable Remainder Trust, IRA Trust, Grantor Retained Annuity Trust or a Gifting Trust.
In addition to a will or trust to help you distribute your assets after death, an experienced estate planning attorney can help you with documents you may need to meet life’s unexpected challenges. A durable power of attorney assigns an individual to make financial decisions on your behalf if you are incapacitated by injury or illness. A health care directive outlines which life-prolonging procedures, if any, you desire and a HIPAA release designates who can access your health information and discuss specifics about your condition with medical professionals.
As 2019 gets underway, keep in mind that we are not promised tomorrow. Make a plan today to contact a trusted estate planning attorney, who can help you make sure that you and your loved ones are provided for in the way that you wish. Having a plan will help you start this year right.
Richard Barid and Michael Smith are co-founders of Savannah-based Smith Barid LLC, which focuses on estate planning, special needs planning and elder law planning. They can be reached at 912-352-3999, firstname.lastname@example.org or email@example.com.