The majority of people put the process of estate planning on the back burner for far too long. In many instances, when they finally take action, they do not act in a fully informed manner. With this in mind, we are going to share a handful of simple but useful tips in this post.
Avoid DIY “Solutions”
If the thought of going through life without an estate plan is nagging you in the back of your mind, you may impulsively decide to take action in a given moment. There are websites out there that sell generic, boilerplate last will documents. You can just fill in the blanks and voilà, you have an estate plan, or at least that’s the way the marketing material reads.
In fairness, it is possible for a layperson to create a last will that would be valid in the eyes of the law. However, there are specific rules that must be followed, and in fact, a last will is not always the right choice.
When you are arranging for the transfer of everything that you have accumulated throughout your life to the people that you love the most, the stakes are high. You should certainly weigh your options and take the right steps. Yes, DIY projects can be quite positive, but you have to know where to draw the line.
Consider Latter Life Eventualities
A lot of people think that estate planning is strictly a financial endeavor, but it should not be viewed in this light. It is wise to consider the period of time that will lead up to your passing.
According to the Alzheimer’s Association, approximately 40 percent of people that are 85 years of age and older have contracted the disease. There are other forms of dementia, and this is not the only type of incapacity that some elders experience.
If you do nothing to prepare for possible incapacity, the state could ultimately appoint a conservator to manage your affairs. To take the matter into your own hands, you could proactively embed an incapacity planning component within your broader estate plan.
This will typically involve the execution of documents called durable powers of attorney. You can name medical and financial decision-makers with these documents, and a living will could be added to state your life-support preferences.
Explore the Value of Living Trusts
Far too many individuals think that a last will is the right choice as an asset transfer vehicle unless you are extremely wealthy. In reality, this is not the case at all. A living trust can be a far better option for a wide range of people that are not multimillionaires.
We will get into the details in another blog post, but to provide a quick overview, one major benefit is the avoidance of probate. This is a costly and time-consuming process that would enter the picture if a last will is used.
Getting back to the subject of incapacity, if you have a living trust, you would act as the trustee while you are alive and of sound mind. To account for potential incapacitation, you could empower a disability trustee to administer the trust if it ever becomes necessary.
These are a couple of the benefits, but there are many others. Before you make any final decisions, you should educate yourself thoroughly.
Be Prepared to Update Your Plan
An estate plan is going to be based on the circumstances that existed at the time it was created. Inevitably, things change over the years, and your existing estate plan may become obsolete. You should look at estate planning as an ongoing process, not a “one and done” endeavor.
Obtain Legal Counsel!
You would do well to discuss your unique situation with a licensed estate planning attorney. Each case is different, and your estate plan should be custom crafted to ideally suit your needs.
Personalized attention is key, and this is exactly what you will receive here at our firm. If you would like to schedule a consultation, give us a call at 310-337-7696 or send us a message through our contact page.
- Things You May Need to Update in Your Estate Plan When You Enter Retirement - March 22, 2023
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- 7 Estate Planning Steps for the Beginner - March 16, 2023
