In our previous two articles, we have been discussing important areas to be aware of when thinking about estate planning. So far, we have mentioned the potential importance of maintaining harmony in the family, avoiding probate, taking advantage of asset protection opportunities, tax planning, keeping attorney’s fees manageable and making sure to select successor fiduciaries and contingent beneficiaries in your estate plan. Here we offer some final suggestions.
Some forms of non-probate property have beneficiary designations indicating the person to whom the proceeds will go. Such assets include life insurance policies and retirement accounts. It is very important to ensure that your beneficiary designations are updated, so that the money goes to the correct individual. This is especially important for individuals who are divorced.
Another suggestion is to review joint accounts co-owned with children and to avoid creating joint accounts as a way to leave assets to family. There are a number of reasons why such arrangements can be risky. Jointly owned property can be exposed in the event of divorce, bankruptcy, or other creditor problems, and there can be gift tax issues associated with adding a joint owner to an account. In all likelihood, there are probably better ways to leave property with less risk.
Another excellent suggestion is to keep your estate plan flexible, since family situations, laws, and planning goals change. Living trusts can be excellent tools to keep an estate plan flexible, since they go into effect when signed, can give family control if you become incapacitated, and can be altered easily.
The last suggestion is more practical in nature. That suggestion is to start estate planning sooner rather than later. Because life can happen quickly, planning should be done at a time when the financial and mental resources are in place to do so.
Source: Statesman Journal, “Top 10 estate planning concerns,” Eden rose Brown, 3 June 2011.