Are you putting off getting your will and estate plan in order because thinking about death is scary? (It is!) Or do you think you need a lot of money to need a will or estate plan? Or perhaps you draw a blank when you think about who might be the right guardian for your small child.
These are all understandable roadblocks to proper estate and guardianship planning, but it’s important to realize that you can take better care of your family – in life and in death – if you discuss these matters with a qualified attorney and get the proper documents drawn up and signed. Why not make this one of your goals to achieve before the end of 2014? Then you can focus on those New Year’s resolutions with peace of mind!
Here are the five top reasons to get your will, estate and guardianship work done now instead of putting it off:
1. Leave a clear roadmap for your family in case something happens to you.
If you don’t speak up while you still have a voice, the reality is that your loved ones are going to be left trying to sort out what it is you wanted and who (of them) should make what can be very tough decisions. If you come from a family where there’s usually a little bit of drama at any family gathering, it is even more important that you make your choices known. Finalizing your will is going to make a huge difference for the people you will one day leave behind. And remember, you can and should update your documents every few years because life itself moves and changes. So, as you think through your choices be firm, but recognize that you are free to change your plans over time.
2. Update the Guardian designations in your Will.
Do you remember who you chose? Maybe you were the conscientious parent who created a will right after you had a baby, but now your baby has turned into an active and happy young person. It’s quite likely that as you and your partner learned how to parent, you developed your own unique set of parenting values. As you review your Guardian designations, ask yourself if your parenting philosophies still align with the people you originally chose as guardians for your children.
This is also a good time to review whom you chose to be in charge of your child’s inheritance. Does that person still seem like the best choice? It can be hard to make time for these difficult questions, particularly with a busy family. But most people feel a sense of relief after they review and update their guardian designations.
3. Make sure you can make medical decisions for your young adult child.
It’s a big shift for parents, but once your child is eighteen, you won’t, for example, have a right to see their college grades. That’s initially perplexing, especially if you’re paying for their education. But a more serious issue also arises: who will make decisions on your child’s behalf if she or he suddenly becomes ill or incapacitated? As odd as it sounds, the law presumes that you can no longer make medical decisions for your adult child. So, before your son or daughter goes back to school after the holidays, spend a little time getting two key documents – a Durable Power of Attorney for Health Care and a HIPAA Authorization – into place. It will enable you to make decisions on your adult child’s behalf in the event of an emergency.
4. Update your Beneficiary designations.
If you’ve been working for the same employer in the same position for a number of years, or you lead a stable company, you may want to revisit and update your beneficiary designations. It could be that you previously named your sister, but now you have a child who should inherit your estate. Or, maybe you’ve forgotten that you named your ex-spouse! If so, your ex-spouse stands to gain in the event of your death.In most cases, it doesn’t make any difference what is stated in your Will or Divorce Decree. Your Beneficiary designation trumps both of these. It’s always a good idea to take another look at Beneficiary designations if you haven’t done so in the last three to five years, or if there has been a significant change in your family such as a divorce, adoption, or death of a spouse.
5. Review your insurance coverage.
The end of the year is a great time to do a an annual audit of your budget and insurance coverage and to make sure that your life insurance coverage will take care of your loved ones. If you are a one-income family, make sure you have a life insurance policy on the wage-earner and make sure the policy will cover the family’s basic expenses for things like mortgage or rent. If you are a two-income family, make sure your life insurance coverage will maintain the household lifestyle for the surviving spouse in the event of a death.
Baby boomers should consider long-term care insurance. Long-term care insurance generally covers in-home care, assisted living, adult daycare, respite care, hospice care, nursing home and other skilled care, and is designed partly to preserve family assets which would otherwise be used to pay for your care.
6. Talk to your children about your Estate Plan.
Without getting too specific, it’s very helpful to your children if you can talk with them in general terms about what you are planning and why. The more they understand your wishes, the more likely they will readily accept their responsibilities – and that will help alleviate any discord after you are gone. This is also a good time to talk with them about your values, the opportunities that money can provide, and how money is used as a great help for social good and positive change in the community at large.