Helpful Estate Planning Opportunities
Updated: Aug 19
‘Shelter in place’ orders are allowing families to spend extended time together. One way to spend that time productively is to discuss any outstanding estate planning needs your family may have.
Below are a few timely guidelines your family may want to consider: Locate and review existing estate planning documents
It’s easy to take the “set it and forget it” mentality when it comes to estate planning. If you already have an estate plan in place, now is a perfect time to verify it still fits your needs. First, make sure you can easily locate all relevant documents. Many of our estate planning clients rely on us to house their documents for peace of mind; contact us if you require a copy. Review all documents carefully, including all designated agents and beneficiaries. Once your documents have been reviewed, be sure to make your attorney aware of any updates to avoid unintended consequences.
Benefits of this particular estate planning option include:
Flexibility – Whereas wills only become effective upon death, RLTs are effective during the owner’s lifetime and allow assets to be fully accessed while alive and mentally able. Any use of assets does not require additional tax returns to be filed, and the trust can even be completely cancelled or revoked.
Control – In case of disability, the RLT protects the owner by assigning the person(s) responsible for making the determination of incapacity, outlining decisions regarding the management of trust affairs and assets and reserving power to make gifts. RLTs also keep matters private and avoid the cost, delay and potential humiliation of court proceedings.
Probate Avoidance – The probate process can be expensive, inefficient, public and unnecessary. Assets in a RLT are not probate property. By placing assets in the RLT during his or her life, the decedent will have saved the family the cost of the court proceeding and delays inherent in probate as well as kept the inventory and transfer of assets private and not part of the public record.
Protection – A simple will allows an individual to select who will receive his or her assets, which can be open to creditor debt or beneficiary misuse upon receipt. With a RLT, the owner can set parameters for asset usage to protect them from being wasted or lost.
Tax Reduction – In many cases proper RLT and tax planning can significantly reduce, and sometimes completely eliminate, any estate tax exposure.
A fully funded RLT can enable clients to dispose of property as they choose, while avoiding the costs and delays inherent in the probate process and assist in saving them significant inheritance and estate taxes. A RLT also protects clients during mental disability and can safeguard the client’s beneficiaries from themselves and creditors (including divorcing spouses or ex-spouses).
Ensuring that your children are well taken care of in the event of your death is an essential part of your estate plan. It is imperative that the naming of legal guardian(s) is executed in a thoughtful and purposeful manner while your children are still minors to avoid any complications. The choice of a guardian should be based on your child’s needs and your current wishes. Any existing guardianship provisions should be reviewed regularly to ensure they do not become outdated. If your primary choice is now unwilling or unable to fulfil their duties, your estate plan should reflect these updates.
With decisions this significant, it is wise to work with an experienced estate planning attorney to verify your wishes are clearly stated.
Did you know that once your child turns 18, access to their medical and financial information is not guaranteed? Privacy laws such as HIPAA can prevent a parent from automatic access to their child’s health records. As a result, if your child becomes ill, it may be difficult for you to make decisions on their behalf if necessary. To avoid this, you and your children should execute two documents that allow you access to medical information or take financial action should your child become incapacitated:
Power of Attorney for Healthcare – gives you the power to make medical decisions on your child’s behalf
Power of Attorney for Property – gives you the power to handle your child’s financial matters such as credit card bills, rent/utilities and bank account access
These decisions are important even without a global pandemic. Now is the time to prepare for any health emergencies your family may encounter.