This post contains a summary of information obtained from laws, and legal publications, should not be viewed or relied upon as legal advice and should only be used for educational purposes only. This post does not create an attorney client relationship. This post is not being used as a solicitation. I urge readers of this memorandum to contact me, or your own attorney, directly regarding specific legal issues and factual circumstances
A New Year’s Resolution for 2012
Estate Planning Cheat Sheet
1. No matter your net worth, it’s important to have a basic estate plan in place.
2. An estate plan has several elements.
A basic plan can include: a Will with provisions so that your minor children do not receive their inheritance at too early of an age, durable power of attorney, HIPPA, Temporary Guardian Affidavit, living will or heath care proxy, beneficiary change instructions, affidavit for remains and possibly some basic tax planning.
3. Taking inventory of your assets is a good place to start.
Your assets include your investments, retirement savings, insurance policies, and real estate or business interests. Ask yourself three questions: Whom do you want to inherit your assets? Whom do you want handling your financial affairs if you’re ever incapacitated? And are all of my beneficiary designations up to date? Did you buy life insurance or set up those retirement accounts before you were married or had children? If so, did you ever request a change of beneficiary after those events occurred?
4. Everybody needs a will.
A Will tells the world exactly where you want your assets distributed when you die. It’s also the best place to name guardians (temporary, permanent and contingent) for your children. Dying without a will — also known as dying “intestate” — can be costly to your heirs both financially and emotionally. Please, if for no other reason, consider writing a Will today
5. Trusts aren’t just for the wealthy.
Trusts are legal mechanisms that let you put conditions or give explanations on how and when your assets can and should be distributed upon your death. Depending on the type of trust chosen you may also be able to reduce your estate and gift taxes and distribute assets to your heirs without the cost, delay and publicity of probate court, which administers Wills. Some kinds of trusts also offer greater protection of your assets from creditors and lawsuits.
6. Discussing your estate plans with your heirs should help prevent disputes or confusion. Tell your family where you keep your Will? Do you have online accounts with passwords (like e-mail, Facebook, the Cloud, outside storage sights)? Who knows those passwords? What do these entities say happens to your virtual presence if you should pass away? Do you have a safety deposit box? Who besides your spouse knows where that is?
7. The federal estate tax exemption — the amount you may leave to heirs free of federal tax — changes regularly. In Oregon, our exemption is only at one million. Are you surprised by that? Do you know what assets are included in that one million dollar limit? Do you know what the tax is for estates over one million dollars?
8. You may leave an unlimited amount of money to your spouse tax-free, but this isn’t always the best tactic.
By leaving all your assets to your spouse, you don’t use your estate tax exemption and instead increase your surviving spouse’s taxable estate. That means your children are likely to pay more in estate taxes if your spouse leaves them the money when he or she dies.
9. You might want to leave some instructions to your children and their guardians about how you would like your son or daughter raised? Maybe you have photo albums, digital pictures, wedding tings, heirlooms, collections that you want to ensure are kept with the children. Do you have a family pet? Can your puppy, kitten, hamster or guinea pig stay with the kids?
10. “If you want to make an easy job seem mighty hard, just keep putting off doing it.” ~Olin Miller Making the decision to meet with an estate planning attorney, hopefully, will be the hardest part of this process. But once you find an estate planning attorney that you like, depending on whom you choose, the rest of the planning should be relatively easy, very informative and empowering. Drafting a Will is one of the greatest gifts you can give to your spouse/partner and children. “It’s not what you gather in life, but what you scatter in life that tells the kind of life you’ve lived and the kind of person you are.” —Helen Walton, wife of Wal-Mart founder Sam Walton, died in 2007 at age of 87.