Why Should I Get My Estate Planning Done Now?

Last Sunday I learned that my mother’s dear friend who is very active, hikes daily, gardens daily, does senior yoga weekly, eats a healthy diet, and has many volunteer and social commitments that keep her happy, went on a three-week trip to Africa, and while there died suddenly of a heart attack. That same day, Kobe Bryant’s helicopter crashed and the 9 passengers aboard perished.

Sunday’s news not only made me pause to reflect on the lives of those who died and to grieve the loss that all of these families are suffering, it made me pause and think about what is important in my life. What came to mind first was: loving my family. Being present in the moment with them. Spending meaningful time, stopping to smell the roses, to read stories together, to cook together, play games, laugh together, to watch the sunset, take hikes, swim in the ocean, to take a walk before work, to chat with neighbors and friends whenever possible. Our family, our friends, our human connections (maybe our animal connections) are the most valuable treasures in this life.

Based on my daily job, I also had to reflect on what does not seem so important but is part of our reality:  the worldly treasures that we work hard for most of our lives and when we are gone, how will we plan for these treasures to be utilized because that planning will affect the lives of our loved ones. Planning for your family can make the difference to give a surviving spouse the ability to stay home and raise children, provide for the long-term care needs of a surviving spouse, a child or grandchild’s higher education, or the ongoing care of a disabled child or family member.  

“Estate Planning” is more than just writing a Will that tells the Court how you want your assets to be distributed at your death. It is:

• Planning for the well-being of your spouse, your children, and possibly your parents;
• Planning for who will take care of your minor children;
• Planning for who will manage the assets you have worked hard to save and grow and the protection of those assets after you are gone; 
• Planning to take advantage of available tax benefits at your death that could be wasted without proper planning; 
• Planning to reduce the size of your estate if it will be taxed at your death; 
• Planning for your retirement accounts to be passed on in the most tax advantageous way to beneficiaries; 
• Planning to not spoil a child’s motivation;
• Planning so relationships will not be destroyed because of inheritance;
• Planning for the proper transfer of jointly owned property.

There are many aspects to planning your estate. The hardest part is making the decision to get started. Your professional advisors can assist you with your questions and how to prepare to get started; they have the map and directions, you need only provide them with your information and, after being advised with respect to your various options, you decide on what an appropriate plan will be for you and your family.

You may consider writing a Will which tells your loved ones how you want your assets to be distributed upon your death and who should be in charge of administering the distribution of those assets. A Will has to go through a time consuming and costly court proceeding called a probate in order for your assets to be distributed, but your estate will be distributed in the manner you direct. For smaller estates, using payable on death beneficiary designations and Revocable Transfer on Death Deeds along with a Will can avoid a probate proceeding if done properly.

You may consider establishing a living trust which actually owns your assets during your lifetime. You can be the Trustee of your Trust and control all of your assets. If, during your life you are incapacitated, rather than a Conservatorship being required (a Court proceeding where a Conservator is appointed to manage your affairs), the Trust directs a Trustee of your choosing to manage your affairs and the trust on your behalf. Upon your death, the trust is distributed as you have provided and there is no probate proceeding. A Trust can provide for contingencies and future generations and is what many people chose for their estate planning needs due to its cost effectiveness and the timeliness.

These are two very basic aspects of estate planning that you should discuss with your estate planning attorney, financial advisor, insurance advisor and accountant. There are many more basic and advanced planning techniques available to address your specific planning needs.

Kira S. Masteller is a Shareholder in our Trust & Estate Planning Practice Group.