While many people focus on getting out of debt or getting organized for the New Year, estate planning is an equally important personal finance goal that should make every adult’s to-do list. That’s simply because resolving to get your legal affairs in order is one of the most important things you can do to make sure your family, wishes and assets are protected if something unexpectedly happens to you this year.
As an estate planning attorney, I know that far too many adults are without plans to protect the people or things they love the most should the unthinkable occur.
Yet it’s important to remember that without such documents in place, no one would have explicit permission to manage your affairs or make key financial decisions for you if you were incapacitated or in an accident. Not to mention that heirs you may not even like could inherit your estate!
That is why at a bare minimum, every adult needs a basic will or trust (depending on the amount of assets you own and other potential complications), and power of attorney forms in place to avoid a legal and financial nightmare if something unexpectedly happens.
If you’re not sure what exactly these documents are, I’d like to offer a brief crash course.
For starters, a Will is a document that specifies what should happen to your assets if you pass away. This helps to ensures that your assets are distributed to the people you want, in a way you want, if something happens.
A Trust on the other hand is a legal entity that can hold title to property. With your assets securely placed in a trust, you can minimize your financial exposure to lawsuits and divorce while alive. Upon death, a trust will keep your affairs private and out of the probate court. It also allows a great deal of control for people who do not want their inheritance going outright to their heirs at a young age.
A power of attorney gives explicit permission for someone to access your bank accounts, pay bills and handle all other financial and legal affairs if you are incapacitated in an accident but do not die. Under the current privacy laws, even a spouse may have a hard time accessing personal information without such documentation in place.
Remember, accidents and serious illnesses often happen without warning. That is why it’s so important for any adult who has not tackled their estate planning to add it to their list of New Year’s resolutions this year. It will ultimately save your family from years of headaches and thousands of dollars in unexpected costs should tragedy strike. If you have already taken care of your planning then do a good deed and tell someone else! If your parents, best friend, or siblings haven’t gotten their planning in place then forward them this email. They will thank you for it.
Early 2015 is the time to think about these three crucial issues and how they may relate to your own estate strategy. Make that New Year’s resolution today and call us for an appointment to review and revisit your current plan and goals. We will discuss with you the best possible solutions to meeting your estate plan objectives.