It’s that time of year again. You have to remember to pick up a turkey or maybe a ham. You have to decorate inside and out. And the presents — something for everybody on your list.
Oh, and don’t forget to update your estate plan.
Surprised? Don’t be. Your estate plan needs to change as often as your life changes. If there is a new member of your family at your table this year, or perhaps a missing member, then you might need to update your estate plan.
If your gift list is longer or shorter this year, that might signal a change as well.
Perhaps you’ve never taken the time to create an estate plan at all. The idea may sound grandiose, but if you have any assets and anyone to whom you would like to give those assets, then you need an estate plan. Do you want to enter the holiday season knowing that your loss could put the loved ones around your table in an uncertain position?
A good start to an estate plan can be as easy as writing a will. A will sets out who you are, who will be in charge of settling your estate when you pass away and how you want the things you own distributed.
A will should revoke any prior wills you have created and set guardians for your minor children, if any.
But perhaps your assets or goals require something a bit more sophisticated. A qualified estate planning attorney can help you write a will that can be used to shepherd assets for minor children, to minimize estate taxes and to provide for more structured distribution of assets to your beneficiaries according to your specific instructions.
Remember that wills, either simple or sophisticated, must go through a court process known as probate. Probate can be time consuming, costly and, because it is public, provides a ready venue for anyone who wants to contest the will.
Alternately, a revocable living trust can serve as a will substitute, without the extra cost, time delays and potential legal problems of a will. A revocable living trust is a private, flexible estate planning tool that holds and distributes your assets with little or no court intervention according to a set of terms outlined in the trust.
Everyone’s situation is different, but here are some of the ways that our clients have structured their trusts to protect their families. A revocable living trust could:
• Protect a spouse from losing the assets you’ve built together in a subsequent marriage/divorce;
• Protect children’s inheritance from many types of creditors;
• Give loved ones an incentive for doing things you consider worthwhile (finishing an education, remaining gainfully employed, staying away from drugs and other self-destructive behavior);
• Prevent a child from losing his/her inheritance in a divorce.
Perhaps you have already created a basic estate plan but changes in your family, assets or goals now require additional planning.
You should also look into a durable power of attorney, a health care directive, a HIPAA release or one of several kinds of trusts, including life insurance trust, qualified personal residence trust, charitable remainder trust, grantor retained annuity trust or a gifting trust.
A qualified estate planning attorney can help you determine whether your estate plan still meets your needs and goals.
Michael Smith and Richard Barid are co-founders of Savannah-based Smith Barid LLC, which specializes in estate planning and special needs planning. They are both accredited VA attorneys with extensive experience arbitrating denied pension claims. They can be reached at 912-352-3999 or richard@smithbarid.com or msmith@smithbarid.com.