Month: December 2012

Don’t Wait Until Boarding To Think About Estate Planning

Many of my clients contact me when they are planning trips. People are often reminded of their mortality when they consider flying in a plane or beginning a long road trip. They think about what estate planning they have done and the things left undone. What will happen if we don’t return due to an accident or illness?

These thoughts cause travelers to actually make a list of things that they need to accomplish before leaving. Sometimes the list gets taken care of and others are put off until another time.

Here are some thoughts about things that you need to do before your next trip, so you are able to travel with peace of mind.

Have all of your estate planning done in advance of any travel plans. The time is now to get your documents in order and make your decisions about your bequests. Don’t procrastinate any longer.

Now might be a good time to review your existing estate plan to make sure it still complies with your wishes. Things might have changed. There may have been divorces, births or remarriages that need to be addressed. Make sure these items are taken care of before your next trip.

If minor children are involved, make sure that the guardian you have named is willing and capable to serve if something happens to you. Also, this is the time to consider if you have made the best choice for a guardian. Perhaps it would be appropriate to name an alternate, in the event the other is unable or unwilling to serve as guardian.

Consider reviewing your life insurance. Make sure it will still cover your family’s needs and examine the needs of long-term care insurance.

It is also a good idea to have everything organized and easily found, in the event of a tragedy. Make sure your trustee or administrator is aware of where all of the important documents are in advance of some catastrophic event.

Finally, it would be an excellent time to advise your children about where you have banking and investment accounts. It might even be an opportunity to let them know what your assets are and what you have planned for them. It can also give you the time and opportunity to let them understand your values and the opportunities that your generosity provides for their families.

Don’t Forget About Estate Issues When Getting Divorced

Estate planning is probably not something that seems to be relevant when a couple is going through a divorce. People don’t need something else to deal with during that traumatic process. However, there are several things that you should consider doing that could have a huge impact on how your wishes are carried out.

It is very important that individuals going through the divorce process or ones newly divorced have their wills rewritten and updated. This is something that people tend to procrastinate about, though they fully intend to have it done. Unfortunately, days become weeks and weeks become months. A heart attack or stroke could have a devastating impact on your wishes, if you have failed to have your will updated..

You might need to reconsider your personal representative or executor. This is the appointed individual who makes certain the provisions made in the will are carried out.

If minor or disabled children are involved, you may want to reconsider who you have chosen to be their guardian should something happen to you. Perhaps a living trust can help accomplish your wishes without going through probate.

Another thing to consider doing is having your durable power of attorney rewritten. This general durable power of attorney designates someone to be your attorney in fact. They then have the power and authority to act in your behalf and perform all legal actions for you. If this person is your ex-spouse in your original power of attorney, you would undoubtedly want to revise this document.

If you have a health care power of attorney or living will, you should consider having those rewritten. These documents provides instructions regarding what type of treatment you desire, in the event that you become terminal and recovery is not anticipated. The health care power of attorney appoints someone to make those decisions for you. A spouse is usually designated as having that authority, so you might consider revising this document.

Attention needs to be directed to any retirement investment accounts and life insurance policies, to make sure that your ex-spouse is removed as primary beneficiary. The process is relatively simple and is as easy as making phone calls to the brokerage firm and the life insurance company requesting change of beneficiary forms. Once you have signed these documents and returned them, you will receive a notification that the changes have been made.

Telling Your Children About Their Inheritance

Many parents are unsure about what to tell their children about their inheritance for fear that their knowledge of even the most modest amount might cause them to be less productive adults.

Considering predictions that the baby boomer generation is going to inherit approximately $12 trillion from their parents, this is understandable. A 2010 study by MetLife determined that the median inheritance for two out of three baby boomers was approximately $64,000.

Parents who have considerable wealth are often reluctant to let their children know how much they stand to inherit out of fear that they may have no incentive to become employed and lead productive lives.

On the other hand, parents who do not have as much might be concerned that whatever they have accumulated will be used up for their own retirement and other needs. Under this scenario, children who had anticipated an inheritance would not receive anything.

In either situation, it is wise to at least discuss, in general terms, what you have or don’t have with your children. Tell them where your important documents are, and let them know who is to be your trustee or executor after you go.

This provides you with an opportunity to discuss family values and to tell them about your life. Studies have shown that children want to know about the struggles their parents have gone through and where they were raised. Share your life story with them and consider giving them something that has meant a lot to you for their safe keeping. It is also a good time to consider scheduling family vacations so that the entire family can get together or discuss plans for the holidays. By doing this, you will be instilling your belief in family values and traditions in your children.

Regardless of your financial situation, it is important that you have a durable power of attorney, health care documents and a trust or will established. The will is by far the most basic succession planning document and trusts are more flexible and advanced estate planning tools. The durable power of attorney allows you to appoint someone else to handle your financial affairs for you while you are alive and unavailable or incapacitated. Health care documents are living wills and a health care power of attorney.

These documents designate what type of care you want if you cannot make decisions for yourself or appoint someone to make them for you.

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