Whether you are newly married, just had your first child, or are creeping up on your retirement, it’s a good idea to start thinking about putting together your estate plan. Creating an estate plan will help you to find peace of mind by knowing that in a moment of crisis, those closest to you would be taken care of.
There are many downfalls to failing to create an estate plan, not the least of which include having your children taken into protective custody if you haven’t named a guardian, and not purchasing adequate life insurance to care for your loved ones when you pass on.
In addition, without a will or trust in place, your assets could be withheld from your intended beneficiaries for months or even years by the courts.
But, there are a lot of best practices, as well as some potholes to avoid when planning out your estate. This post will review everything you need to know so you can move forward with your estate plan and not be concerned about the future.
North Carolina Estate Planning Best Practices
Let’s face it, estate planning is not easy. If it were, then everyone would have an estate plan. Instead, roughly 70% of Americans with children under the age of 18 do NOT have even a simple will in place, let alone a comprehensive estate plan.
And why don’t people plan? Some people think that it’s too expensive, some don’t have a trusted lawyer to help them, and the vast majority of families “just haven’t gotten around to it.”
So how can you get started in a simple and pain-free way? Here are a couple of ideas for you as we get ready to start a new year.
- Start with the end in mind. Make it a goal to get your estate plan done within a certain time frame. Maybe you want to finish it by the end of January, maybe within 6 months, or maybe you just want to get it done before the end of the year. Set a deadline for yourself so that you can start working toward that goal. And of course, don’t forget to write down that date and keep it someplace so that you won’t forget!
- Get online. There are so many online resources for creating an estate plan that it will make your head spin. Don’t get overwhelmed. But start doing some research so that you have a basic knowledge of what is included in a typical estate plan for someone in your situation. And you shouldn’t have to pay for this – many of the resources are free.
- Sign up for an online webinar or in-person seminar. Attending a seminar or webinar is a great way to learn more about estate planning in a very low-stress environment. In 2017 we will be rolling out a weekly webinar series and regular in-person seminars. If you are interested, submit a contact form and let us know you want to be notified of our next event.
- Think about what you want your plan to look like. Start thinking about who you would want to watch after your minor children, or who you would trust to handle your finances if something happened to you and your spouse.
- Set an appointment with a lawyer. Most online DIY Wills are less than adequate. I know because I’ve seen the ones my clients have brought to my office for a review. Typically, these documents don’t accomplish what you want them to and you may not even have all the requisite documents for a full estate plan. Make sure you get this right and meet with a lawyer – if for no other reason than to ask some questions and start to further understand the process.
Common Estate Planning Mistakes
So you’ve made the decision to move forward and get your estate plan done. Congratulations!
Now, make sure you don’t make these common estate planning mistakes:
- Remember to Update Your Documents Regularly. Life happens, and over time something changes in your life, you will need to update your Will and/or Trust. We recommend reviewing your documents at least annually but at a minimum every three years. Each plan we prepare comes with a free review every three years so that you are never at risk of having your carefully thought out plan fail you because of a change in circumstances.
- Don’t wait too long to prepare a plan. Every day you put off planning is a day in which something could happen to you and/or your spouse. Nobody plans to die or become incapacitated, but everyone will at some point. The problem is, we never know when this will happen. So don’t wait – if you have beneficiaries that you need to make sure are taken care of, get your affairs in order sooner rather than later.
- Make sure your plan is properly funded. Many estate plans fail because after the ink dries on the plan, the well-intentioned individual who made the plan puts the documents in a drawer and crosses “estate planning” off their to-do list. But finishing the documents is just the beginning. You must properly fund your estate plan or else everything that you worked so hard to create will not properly work when your plan is needed the most.
- Don’t forget about disabilities. Estate plans are not just for when someone dies, they are also used to protect your family in the event of your incapacity.
- Make sure your estate plan is complete. To have a complete estate plan, you should have in place the following documents: a will, a revocable living trust, a durable power of attorney, a health care power of attorney, a living will, proper HIPAA authorizations, and guardianship paperwork. In addition, you may want to consider purchasing life insurance, long-term care insurance, and disability insurance.
Have You Considered Legacy Planning?
One of the frequently overlooked aspects of preparing a full and comprehensive estate plan is the intellectual property you may want to pass down. We call this The Legacy Conversation™.
Cooking was very important to my mother, so after she was diagnosed with cancer she typed up all her favorite recipes (things my siblings and I loved as kids) and organized them in a three-ring binder so that we would always have her food! I was so happy to have this binder when it came time to make Christmas cookies this year with my kids!
But family cookbooks are just one facet of legacy planning. You can also record your thoughts with a microphone, prepare a video of yourself, or simply hand-write letters to your kids at various stages of their future lives.
Here at The Hart Law Firm, we offer a service to all of our estate planning clients called The Legacy Conversation™ at the conclusion of the estate planning process. Fill out this contact form to learn more.
Final Thoughts on Planning Your Estate
It is important that you take a good deal of time to really think about and map out what would happen to your family if something happened to you.
Do you want your spouse making all the decisions, or do you want someone else to have a say?
Do you know who the temporary and permanent guardians for your children should be?
Have you considered who you want to be the executor of your estate?
Have you considered who will take care of your pets? You need to determine who you want to care for your animals when you can’t, and you may even want to provide some cash to this individual via a pet trust to pay for your pet’s food and medical expenses. Make sure that the lawyer you hire for your estate plan will include this service in their overall fee.
Once you have taken some time to plan everything out, you will start to feel much better about not only the process of estate planning but the fact that your family, beneficiaries and other loved ones will be properly cared for and your wishes will be honored.
If you have further questions or would like to sit down and talk to Cary Estate Planning Attorney James Hart, you may contact our office at (919) 460-5422 or fill out our online contact form.