Key Points in Estate Planning

Only 33% of Americans have a will or living trust, according to Caring.com. Of these, one in three believe they don’t have enough assets to leave behind.

Many people think their estate planning is a single event. Once they have prepared a will, living trust, or other end-of-life documents, they can file them away, satisfied that they have taken care of their loved ones.

However, an estate plan is a living set of documents that needs to be updated as life happens.

Even for people who are vigilant about updating their estate plans regularly, there are aspects they may miss.

For example, a commonly neglected aspect of estate planning is forgetting to add or update beneficiary designations for retirement accounts or life insurance policies.

Your estate plan involves many people, such as the people you select as decision-makers and beneficiaries. Therefore, when updating your estate plan, you need to consider not only what will happen to you but also what is likely to happen to them.

Here are some questions to consider to help you determine whether it is time to make some changes to your estate documents.

Choose your backup decision-makers

Have you considered who should make decisions for you if you can’t?

Whether it’s death or disability, there will come a time when you cannot make decisions about how you and your loved ones will be cared for.

Your estate documents can make your wishes known. These decisions should not be taken lightly because these people can exercise considerable control over you and your affairs.

Another key point is to choose someone you trust implicitly, plus at least two backups for each role. You never know when life circumstances and your perception of how these people manage their lives may change.

These changes can happen in a split second and will impact their ability to serve in these roles to support you.

Decision-making roles include:

1. Personal representative: the person you choose to administer your estate through the probate process after you die.
2. Trustee: the person you choose to manage your trust’s money and property.
3. Guardian: the person you give legal responsibility to care for your children, including adult children who are unable to care for themselves.
4. Financial power of attorney: the person with the legal authority to handle your financial affairs if you cannot manage your own affairs.
5. Medical power of attorney: The person with the legal authority to handle your medical affairs if you cannot do so.

When choosing decision-makers, consider whether they:

1. Have difficulty handling their finances before choosing them to be a trustee.
2. Are overwhelmed managing daily life and caring for their children before choosing them as your child’s guardian?
3. Are at an age that makes it difficult to fulfill the decision-making role.
4. Are willing to take on the role?
5. Have health issues that may limit their ability to fulfill the role.

This is why it is essential to re-evaluate your choice for these important decision-making roles and name backups in case something happens, and you are no longer able to amend your will, trust, or other estate planning documents.

It is much better to have several backups. If you should die unexpectedly, having multiple backups will mean that it is very unlikely that your end-of-life matters will end up being decided by the courts.

Have you chosen contingent beneficiaries?

A beneficiary is a person you choose to inherit your accounts and property. As part of estate planning, you will name beneficiaries for your bank accounts, investments, and insurance policies.

When you die, and your estate is administered, these accounts and property will be distributed or managed on behalf of your beneficiaries.

You may need a backup beneficiary in case:

• Your primary beneficiary predeceases you.
• Your primary beneficiary cannot be contacted.
• Your primary beneficiary refuses their inheritance.

If you have not named beneficiaries, your money and property may be distributed according to state law. However, this may require going through the probate process.

This process can delay distributing your money and property, be costly and lead to disagreements between family members because they do not know what your wishes might be.

Contingent Beneficiaries

A list of contingent beneficiaries that covers multiple scenarios can prevent this from happening

In the rare scenario where you outlive every possible beneficiary named in your estate plan, and there is no one alive to receive the proceeds from your estate, contingent beneficiaries will not be a solution.

If you have no surviving family, the government can end up with your money and property depending on where you live and the laws that govern that area.

One solution is to add a remote contingency beneficiary clause or family disaster plan to your estate plan.

This allows you to name a charity or other organization as your beneficiary.

Have you made plans for your pets?

Though pets are more self-reliant than children, it is also important to ensure that these much-loved furry, feathered, or scaly friends are taken care of if you no longer can.

Though your pets are taken care of and loved day to day, they may not be top of mind when you meet with your estate attorney to create your estate plan.

Many people think of their pets as their children. But did you know you can name a legal guardian for your pets, just like you can for your children?

Just like with other decision-makers, it is important to have a backup list of people willing and able to take care of your pet if your first choice cannot.

You can also provide instructions on how your loved ones can find a suitable home for your pet or even shelters you are comfortable with in case no one is able to care for your pet.

To ensure your wishes are known, put your list of caretakers in writing and put your wishes for their care in writing as part of your estate plan.

Include favorite foods, toys, medical providers, medications, and even any quirks or preferences that your pet may have.

Have you planned for the unexpected?

Illnesses, injuries, and the death of family members are frequently the wake-up call that prods most people into prioritizing an estate plan.

However, as you saw in the Caring.com survey, many people put off estate planning. Common reasons include:

1. Procrastination
2. A perceived lack of money or property
3. Lack of knowledge about the process
4. Concern about estate planning costs

Estate planning does not have to be expensive or complicated.

Think of the cost of the alternatives should you die without an estate plan.

If you have an estate plan, look at it to see whether an update is needed.

Have you included backup decision-makers and beneficiaries?

Are your pets included in your plan? Do you have a disaster clause?

Contact Us

Our estate planning attorneys can help. Whether you are working on your first estate plan or are ready to do an update, The Katzner Law Group can help.

You can schedule a call with us or reach us directly at 855.631.3457 to learn more about how best to plan today to protect those most important to you.