This week I will provide tips for getting your estate plan organized. Before you sit down with your estate planning attorney, there are a few things you should do to make the process go a simply as possible.
First, you need to define your goals. If you were to pass away, who would you want to inherit your assets? If one of these beneficiaries were to predecease you, who would be your back up choice as a beneficiary? How and when would you want these assets to be disbributed? These are some basic goals to address.
Decisions on the distribution of your estate are impacted by the size of your estate, your personal goal and the age and abilities of your beneficiaries. For example, a distribution to your child may need pass into a trust depending on their age and education goals. You might want to set up a plan that will provide for education and health expenses to be made by another mature adult until your child has the life experience to make these decisions on their own.
If your children are minors under the age of 18, then the selection of a guardian is crucial. This will be the person or persons raising your child(ren) in the event that you pass away. Selecting a trusted family member or close friend that has the same morals and ethics you have factors into this decision.
It is a good idea to select multiple successor executors, trustees and guardians. This can institute a system of checks and balances, but is important if your first choice is not able to act in this role.
Secondly, you should gather your important documents and information. If you were hit by a bus tomorrow, where would your trusted executors find information? This should include your estate documents, deeds, titles to vehicles, financial information, and contacts. Also, review your beneficiary designations to make sure they line up with your goals. This is often overlooked. I have seen far too many families rifle through their parents house trying to locate this information. This is a difficult task, but even more so in an emergency or after a loss.
Third, do some self reflection. What is your current health? What are your current assets? Who are your key contacts and trusted advisors?
Many estate planners have tools to help you organize and gather this information. Putting together your personal records in a convenient document will be of great benefit to your family. It can also save time and stress in an emergency.
Your estate planning attorney can help you identify what documents you need and with the information discussed above, they will implement your plan.
However, you must monitor your plan from time to time. Relationships change and trusted family members may move or be unable to act. Your estate plan will need to be reviewed and adjusted. As a rule of thumb, I recommend you evaluate your assets, advisors, family members and trusted executors every five (5) years, but certainly not more than every ten (10) years.
With a little bit of foresight and planning, you can greatly reduce the administrative burden on your family and heirs after you pass, not to mention saving them time from having to discover and understand your affairs.