When most people think of estate plans and wills, they often visualize an older adult making those plans. Many of us feel uncomfortable when it comes to discussing end of life decisions and it is common for people to delay putting their wishes down on legal pen and paper.
But the reality of it is, is that accidents and illnesses can strike at any time and having a solid plan in place not only ensures that our wishes are carried out, but also helps alleviate the pressure these types of situations can have on our loved ones. It is also critical to have plans in place if you have young children.
If a person dies without a will and they have minor children, then the state makes the decision of who will be the children’s legal guardian. The probate court will make the decision over how your assets will be divided among your survivors, regardless of what type of relationship – good or bad – you had with them.
In order to avoid family fighting, and the legal probate process, many people decide to set up living trusts. Other people decide to put assets in their children’s name before they die, however, many attorneys advise against this because – unlike a living trust – you lose all control over your own money.
In addition, while gifting your assets during your lifetime may avoid probate, it often results in the requirement of filing a gift tax return, and exposing the asset to your children’s creditors. A good example of this is putting your home in your child’s name, but they later file for bankruptcy.
It is also critical to make sure that you periodically check the beneficiaries you have on any financial accounts to make sure that these are coordinated with your estate plan.
This is especially true if you have gone through a life event, such as a divorce. Whoever is listed on the accounts is the person who will receive the funds, despite who your will may have listed.
Other issues to consider addressing in your will include granting your personal representative the authority to handle your digital assets. Many people also provide provisions in their wills to address who should care for pets.
Attorneys also often recommend that individuals include an advanced directive or a power of attorney for medical treatment in their estate planning, which designates who they want to be able to make medical decisions for them in the event they become incapacitated and are unable to do so for themselves.
In a discussion about estate planning, Trust and Estates attorney Kerri Castellini commented, “It is never too early to sit down with a probate attorney and legally document exactly how you want your estate to be divided, and to prepare for your own incapacity.”