Sometimes we all need a little help to break the inertia when it comes to projects that may be very important ... but not very fun.
So it is with estate planning.
I mean who really gets excited about meeting with an attorney to discuss disability and death, especially when it is your own?
Enter a recent article in The Business Times titled “Use this checklist to get started on your estate planning.”
Create a will, if you do not have one.
A 2015 survey found that 54% of Americans ages 55 to 64 and about 70% of Americans ages 45 to 54 have no last will and testament. Apparently they do not know that a legally valid will could save their loved ones some potentially (avoidable) probate problems.
Add related documents.
Depending on your estate planning needs, you may need a trust in addition to your will, a general durable power of attorney (for financial decisions) and an advance health care directive (i.e., a health care treatment directive, durable power of attorney for health care decisions and an anatomical gift declaration).
Review beneficiary designations.
Check your documents and verify the designated beneficiaries. These take priority over the provisions in your will when it comes to retirement accounts, life insurance, and other non-probate assets.
Make a list of assets and debts.
Give your heirs an estate planning organizer so that they can reference it should you become incapacitated and when you pass away. List your real property and personal property assets, as well as real estate you own and its value. Be sure to list your bank and brokerage accounts, retirement accounts, other investments and insurance policies. While you are at it list personal property items that have a monetary worth. Finally, make a list of your credit card debts, mortgage, home equity line of credit, and any consumer loans.
Consider making gifts to reduce the size of your taxable estate.
The lifetime individual federal gift, estate, and generation-skipping tax exclusion amount is unified and is set at $5.45 million for this year. Consequently, a married couple can make total lifetime transfers up to $10.9 million tax-free, in addition to the $14,000 per donee annual gift exclusion. This can get tricky. Be sure you seek appropriate legal and tax advice before making any large lifetime transfers.
Reduce, communicate and make wise decisions.
Consolidate your IRAs and bank accounts to shorten your list, eliminate statements, reduce paperwork and reduce fees. Tell your heirs which causes and charities you value and select a reliable executor/trustee.
Work with an estate planning attorney.
Do-it-yourself estate planning is not recommended because there are numerous financial, legal and emotional pitfalls to avoid.
Whatever your personal circumstances, this checklist can help you get started with your estate planning with an experienced estate planning attorney.
Remember: “An ounce of prevention is worth a pound of cure.” When making your financial, tax and estate plans, do not go it alone. Be sure to engage competent professional counsel.
For more information about estate planning in Overland Park, KS (and throughout the rest of Kansas and Missouri), visit our estate planning website and be sure to subscribe to our complimentary estate planning e-newsletter while you are there.
Reference: The Business Times (Sept. 20, 2016) “Use this checklist to get started on your estate planning”