Life's Stages Dictate Different Estate Plans
As you travel through the various seasons of life, you may not require the same estate plan. A plan you created in your 30’s could be vastly different from the one you need in your 60’s.
2. Newly Married. Once you are married, you will probably want to name your spouse as agent on your durable power of attorney for finances and advanced health care directive. You should also create a revocable living trust and name spouse as beneficiary of your 401(k), life insurance policies, pension or retirement plans.
3. Married With Children. Now is the time to amend your trust to provide instructions and designate guardians to raise your kids, should something happen unexpectedly to you and your spouse. Beneficiary designations on life insurance policies, pension plans, etc. should also be updated to cover a situation where both parents die simultaneously.
4. The Middle Years. During this time, your trust should be updated as changes occur such as divorce, additional children, changes in financial situation, inheritances or substantial increase in net worth, or death of a beneficiary or trustee.
5. Retirement. During the retirement years, you may want to add provisions to your trust to make distributions to your children or grandchildren. You may want to designate charitable gifts to certain charities or decide who should receive personal items such as jewelry, heirlooms, or other property. Many people consider preparing care plans which detail your requests for care—from frequency of hair cuts to food preferences—in the event they become incapacitated. If your estate is likely to be subject to estate taxes, you should consider reducing the size of your estate through gifting or creating an irrevocable life insurance trust or charitable trust.
Estate planning is not a one time project. It continues throughout your lifetime. As your life changes, your goals and objectives change which need to be incorporated into your estate plan. For all of life’s seasons and stages, call the Schomer Law Group.
The Importance of Minimizing Surprises
If you have prepared one or more of these documents, the next issue is: have you shared this document with your loved ones? Do your loved ones know who is empowered to make decisions about your care if you can’t speak for yourself? Do your loved ones have copies of these documents? Do your love ones know where to find these documents?
Experts tell us that some of the most stressful events in life include death of a spouse, death of a close family member and a family member suffering from a major illness. This recent Wall Street Journal article illustrates the importance of being open with your loved ones about your end-of-life decisions. The last thing you want during this critical time is for your family members to fight with each other, or your doctors, when the focus should be caring for you during your time of need.
When considering who to place in charge of your care (nominating an agent or ‘attorney-in-fact), it is easy to find yourself with difficult choices about who to put in charge of your care. For instance, if you have two children but one lives far away, does it make sense to designate the local child as your primary agent? Will you offend the other child if you don’t designate him as a co-agent? Will co-agents be able to agree on the proper course of your care? As Ms. Cullen’s candid story aptly illustrates, failing to discuss these matters with your loved ones can easily result in hurt feelings, bruised egos or even worse, brutal litigation. It is frequently the better practice to keep your loved ones informed of your ultimate decisions—prior to your incapacity—so as to minimize the emotional impact of unwanted surprises during the time you need their help the most.
