Avoiding 20/20 Hindsight in 2020: Estate Planning Tips for Ringing in the New Year
As we get ready to ring in the new year, we are reminded that hindsight is 20/20. At The Elder Law Group, we routinely represent executors of estates (known as personal representatives), trustees of trusts, and family members with incapacitated loved ones. In situations where a person failed to execute a proper estate plan before their incapacity or death, their family members are left with 20/20 hindsight of those important estate planning documents they wish had been revised, updated, and/or completed. Here are just a few estate planning tips you can use to ensure your loved ones do not have the stress and worry of hindsight being 20/20 upon your incapacity or death:
Review your Estate Plan with a Qualified Attorney every 3-5 Years or a Major Life Event.
Estate plans are not one and done documents. Over time there are changes to the tax code, changes to the law, changes to interpretations of the law, and changes to your life circumstances. The child you named as trustee of your trust five years ago may now be struggling with a health event or financial difficulty and may not be the best choice of trustee anymore. In addition to reviewing your estate plan every 3-5 years, you should also review your documents with a qualified attorney if you (or your loved ones) experience a major life event such as a birth, death, marriage, divorce, disability, change in residence, or retirement. Sometimes, changes to your circumstances do not require changes to your estate planning documents. However, having your documents routinely reviewed will give you peace of mind that your wishes will be implemented upon your incapacity or death.
Verify your Durable Power of Attorney Includes General and Specific Powers.
Not all durable powers of attorney are created equally. If you have a power of attorney which grants your agent “all” power to handle your finances, your agent actually does not have “all” power. For example, your agent may not have the ability to sell your real estate. Your agent also may not be able to engage in many Medicaid planning techniques. Additionally, if you became disabled, your agent may not be able to take all steps to preserve assets in a trust for you. In Missouri, “all” powers does not mean “all.” Our statutes require specific powers to be listed if you want your agent to have the authority to exercise those powers, including the power to sell real estate or create a trust on your behalf.
Confirm your Beneficiary Designations.
You would not believe how many times we have seen an ex-spouse or ex-in-law listed as the beneficiary of a life insurance policy. We have also had to open probate estates for people who named minor children as beneficiaries of their assets. We have also seen situations where a financial institution lost a beneficiary designation form, which was discovered only after the owner of the financial account passed away. At least once a year you should confirm your beneficiary designations and, if you have minor children, consider having a revocable living trust
Alternatively, confirm your Trust is Funded.
For a trust to be effective, it must be funded with your assets during your lifetime or upon your death. Funding a trust is the process of retitling your assets to ensure those assets are administered by the terms of your trust upon your death. Just because you have a trust does not mean your trust is funded. In other words, just because you have a trust does not mean your trust will control the distribution of your assets upon your death. If you have a trust, then least once a year, and anytime you acquire a new asset, you should visit with a qualified attorney to determine the best way to fund your trust with your assets. Your trust may just be a stack of meaningless paper if your trust is unfunded.
Discuss your End of Life Wishes with your Loved Ones.
It is important to have a health care power of attorney and advanced health care directive (sometimes called a living will) so your loved ones have the legal authority to make end of life decisions for you if you cannot speak for yourself. However, you should also take the time to talk about those wishes and what a meaningful life looks like to you. If you do not know how to start the conversation there are online tools available to assist you, including The Conversation Project, which can be found at: https://theconversationproject.org/. These discussions become impossible if you wait until you are incapacitated and unable to speak to start the conversation. The holidays are a good time to start these conversations, regardless of your age or health status.
The new year brings new opportunities for you to verify that you do not leave your loved ones with 20/20 hindsight in the event of your incapacity or death. The attorneys at The Elder Law Group are experienced in providing specific, tailored legal advice to ensure your estate plan is up to date and will implement your wishes without unnecessary complications. Contact us today at 417-708-2044 or at info@TheElderLawGroup.com to schedule a consultation.
The information in this blog post is provided for general informational purposes only, and may not reflect the current law in your jurisdiction. No information contained in this blog post should be construed as legal advice. No reader of this post should act or refrain from acting on the basis of any information included in this blog post without seeking the appropriate legal or other professional advice on the particular facts and circumstances at issue.