How are you New Year’s resolutions going? They can be difficult to adhere to, often because they usually involve a drastic lifestyle change, or undergoing a demanding or time-intensive activity. But if you resolved to take better care of your family in the new year, the good news is that there is a way to take just a few concrete actions to meet that goal.
Protecting your loved ones by creating your last will and testament is not usually what’s on the mind of most New Year’s Eve revelers. However, if you have the best interests of your spouse, children, or other loved ones in mind, you will ensure that they will have as smooth a transition as possible in the event of your death. It’s an important reality of life to consider even if you are in good health.
Here are some steps to take and aspects to consider in protecting your loved ones by creating your will.
What You Need & Why
You might think that most Americans have at least a basic will, but sixty percent of them do not. It’s not true that estate planning – your wishes on how to distribute your assets after your death – is only a concern for the wealthy. Even if you have just a couple of cars, a few sentimental items, and a checking account, you should decide how these should be distributed, then have these determinations legally established.
It’s important to remember that you do not have to disclose to anyone what your final wishes are. It’s best to include your family members in these discussions so that you can determine what personal items they would like to have. Speaking honestly with your beneficiaries as soon as possible is also a good way to avoid confrontation later one – which is another good way for an estate to end up in probate.
While a will is the most basic, essential element of estate planning, it’s not the only document you should see to. It’s also important to consider distributing your assets in a trust, which is a legal entity created to hold and protect your assets until your death. This is especially important if you are married and wish to quickly transfer money or real estate. In the construction of some trusts, assets automatically pass from one person to the other with simply the presentation of a legal death certificate. A legal professional can assist you in deciding on the best kind of will or trust for your family.
Upon your death, either suddenly or after an extended illness, your family will likely be shocked, grieving, and unsure of what to do. Assuring them that you have taken steps to ensure their financial security and will do your best to avoid legal complications is a lasting gift.
Creating a will can help your family to easily avoid probate. Probate is the process by which the legal system in your state assumes responsibility for distributing your estate, or assets, after you have passed away. Depending on the state, sometimes this is handled by a specific probate court; it can also be addressed by a subsection of a district court. As you might expect, this process is usually lengthy, sometimes up to a year, and can incur costs which your family might not be expecting – usually in addition to burial and medical costs.
You and your family can avoid probate by ensuring that your will is up to date and legally valid. The best way to do this is to work with a legal professional who understands the laws and processes of your state. He or she can take an unbiased look at your assets and determine what kind of will or estate planning will serve you and your family best.
Power of Attorney & Living Wills
You may already be familiar with power of attorney if you have dealt with the estate of another family member, cared for an elderly parent, bought real estate with another person who was in another location, or needed to use it for business purposes. Power of attorney designates a specific person to make decisions on your behalf in the event you are incapacitated. It means this person can buy or sell property, access your bank accounts, or make business decisions. You can decide how much power this person may have, and in what state the person is permitted to act in your stead – for example, how “incapacitated” is defined.
Although they are often developed together and confused for one another, a living will is different from power of attorney. While power of attorney designates another person to make decisions for you, a living will specifies how you would like your medical treatment to proceed in the event you are unconscious or otherwise incapacitated. Living wills require research and serious thought about medical care in the event you are seriously ill. It usually includes directives about life support, feeding tubes, and potential cessation of treatment. These decisions are yours to make, and noting them ahead of time is helpful to your loved ones.
Review & Revise Periodically
It’s wise to review and update your will and other important estate planning documents on a regular basis, perhaps once a year. Changing laws might affect how you structure your estate. Your family may have altered through marriage or divorce, or you may have changed your mind on what charity you’d like to include as a beneficiary. Perhaps you have rethought the provisions of your living will. Children who have grown from minors to adults may no longer need legal guardians in the event of the simultaneous death of you and your spouse. You may also have moved to a new state or even country, which could mean that your will might no longer be valid, even if it was at the time and place it was created. Keeping track of shifting priorities, allegiances, and blended families can help you best take care of your loved ones.