The start of a new year, any new year, is a logical time to take stock, reflect and look ahead. The fact that we are the midst of a deadly, frightening pandemic this time around makes self-reflection all the more important.
A lot of things, many we never even considered important, have changed. Maybe forever. As individuals we certainly have. And its not a matter of debate or opinion. It’s true.
By now most of us have figured out we are not immortal. We’ve seen parents and family members age — some better than others — and know that some things are inevitable. Ignoring them is an option, but not a very good one.
As the end of the year approaches, a common question directed to an estate planning lawyer is, “What should I do to update my estate plan before year end?” The fact that this question is asked is a positive sign – at least the questioner is thinking about how to protect himself/herself and his/her loved ones. Approximately 2/3 of all individuals do not have an estate plan.
The very first step anybody needs to take is to make sure they have the basics covered.
Do you have a plan in place to protect you in the event of incapacity? This requires financial and medical powers of attorney.
Have you reviewed your beneficiary designations recently?
Do you have a plan in place to distribute your assets in accordance with your wishes?
Have you provided for special concerns such as minor children, handicapped children, a spendthrift beneficiary or a child in a troubled marriage?
Have you chosen an individual to oversee the administration of their estate (an executor or personal representative)?
Have you reviewed your existing estate plan to determine if any changes are required?
If you are fortunate enough to have an estate tax problem (only if the value of your assets exceeds $5 million), what steps can you take to minimize this potential liability? You need to be aware that tax laws may change in the upcoming year and the estate tax exclusion may be reduced, perhaps significantly.
Do you wish to assist family members by making tax free gifts, including gifts for education or medical expenses?
Do you wish to consider implementing a revocable trust? It may be used to allow your heirs to avoid probate and to help administer your assets in the event of your incapacity.
Finally, whatever you do, take steps to promote peace and harmony among your family members and best wishes for a healthy, happy and prosperous new year!
Contrary to popular belief, chameleons don’t change their colors to blend in with their surroundings. In fact, although their natural camouflage serves several purposes, the primary function of the color shift is to alert neighbors of danger.