“Death, like taxes, is certain. And like taxes, it’s one of the least pleasant topics to contemplate, let alone discuss with others. Even so, a recent Gallup Poll* indicates half of American adults have faced up to the inevitable and written a last will and testament, directing where or to whom their worldly assets should be distributed when they leave this one.” If you are one of the 50% who have already created a legal document as part of your estate plan there is still some work to be done to ensure your document continues to meet your goals. If you are one of the 50% who has not created a will or trust, you need to start working on expressing your wishes in a legal document and then some. For people over 50, working with an estate planning attorney is wise, and here are some important questions you need to ask.
- Do I have adequate life insurance and long term care in place? If you have minor children you should have a life insurance policy in place for the unexpected to make sure that your family and loved ones are taken care of financially. You should also have something in place in the event you need long term care down the road. There are many policies and options available to cover these possibilities. “Long-term care insurance policies reimburse policyholders a daily amount (up to a pre-selected limit) for services to assist them with activities of daily living such as bathing, dressing, or eating. You can select a range of care options and benefits that allow you to get the services you need, where you need them.” If you do not have a life or long term care policy and are unable to get one it would be prudent to put money aside for these expenses. Have your estate planning attorney review what you have in place now and make sure that you have adequate coverage or assets in place.
- Is my will or trust up-to-date? This is an important item to review with your estate planning attorney. Whenever a life or financial event occurs you should have your will or trust reviewed for any needed updates. If you have additional children you will want to make sure they are included in the inheritance of your estate, and make sure that your estate plan makes provisions for their care. If you create a trust you should review it regularly to make sure your beneficiaries on all accounts and life insurance policies are listed correctly. Your estate planning attorney will guide you in determining when to name your trust as the primary beneficiary and when it is prudent to name an individual such as your spouse. You should also review your documents to ensure that your financial and medical powers of attorney are accurate. Sometimes relationships between loved ones can change and you will want to be sure that the people listed are still the individuals best suited for their respective positions.
- Is my estate plan tax efficient? You want to plan ahead for retirement and possible tax consequences. Review your entire estate with an experienced estate planning attorney and explore possible tax savings vehicles such as a charitable remainder trust. There are avenues to achieve tax savings depending on your specific situation so work with a trusted expert to find those that best fit your estate plan. When looking at your long term financial plan keep in mind that once you reach 70 1/2 years of age you will be have to take Required Minimum Distributions from some of your retirement accounts.
- Does my current estate plan match my goals? Do you want to save your existing accounts and assets to leave as an inheritance or are you hoping to retire early or with a higher standard of living? Consult with your estate planning attorney to make sure your accounts, assets and existing plan match your short and long term goals.
- What should I do with my business? If you are 50 or older and a business owner you may be wondering what to do with your business when you are ready to retire. It’s good to start putting that plan together now; whether you want to retire tomorrow or in 30 years. There are many options for business owners; you can sell your business, leave it to your heirs, or establish a succession plan that is a melding of the two. Your financial circumstances and personal preferences will dictate how to move forward. Regardless of which choice is best for you, you will need properly drafted legal documents to successfully transfer or leave your business to others. Proper estate planning and business succession planning can make all the difference to your finances now and your heirs after your death.
Estate planning is so important to your present, future and legacy. Regardless of your age, if you do not have a will or trust in place; please start putting one together now. We often take tomorrow for granted even though it’s never guaranteed. If you are 50 or older and working with an estate planning attorney, ask the questions above to assist you in establishing your estate plan.